Greece Struggles At Bailout Talks To Persuade Creditors Over Reforms

BRUSSELS (AP) -- Bailout discussions between the Greek finance minister and his skeptical counterparts in the 19-country eurozone will resume Sunday after breaking up following more than eight hours of talks without any apparent breakthrough that will secure the country's future in the euro.

On leaving the meeting, Jeroen Dijsselbloem, the eurozone's top official, said there had been "in-depth" discussions, and highlighted the issue of "trust."

The talks will resume at 11 a.m. local time (0900 GMT), just a few hours before European leaders are meant to descend on Brussels for a summit that has been billed at various points over the past week as Greece's last chance to convince creditors that it deserves more financial help.

Dijsselbloem said the discussions were "very difficult but work is still in progress."

Greece's finance minister, Euclid Tsakalotos is clearly struggling to convince skeptical creditors that the Greek government can be trusted to deliver on its reform promises in exchange for a financial rescue package securing the country's future in the euro.

The pressure has been on Greece all day even after the Greek parliament passed a harsh austerity package that it hopes will lead to a three-year bailout. Over and over, finance ministers and top officials of the eurozone said the same thing as they arrived for the key meeting in Brussels on Greece's bailout proposals - we don't fully trust you to make good on your promises.

Greece's left-wing Syriza government, they said, needed to do a lot more than just publish a 13-page plan of reform commitments before they could sign off on another multibillion-euro bailout deal that would keep the country afloat and prevent its exit from the euro.

A European official at the talks said creditors want "more specific and binding commitments" from the Greek government.

The official, who spoke on condition of anonymity because he's not authorized to talk publicly, says there's a general feeling in the room that the Greek proposals are "too little, too late" and as such, more proof of the government's commitment to follow through is required. The official said those pledges don't "necessarily have to be austerity measures."

That sentiment echoes much of the language in the run-up to the meeting.

"We are still a long way out, both on the issue of content as on the tougher issue of trust," Jeroen Dijsselbloem, the eurozone's top official, said on his arrival at the meeting. "On paper it is not good enough yet - and even if it is good on paper, then we still have the question: will it really happen?"

Greece is running out of time to convince its creditors. A Sunday summit of European Union leaders could be its last chance to prevent the collapse of the banking sector and an inevitable exit from the euro currency.

Greece's banks have been shuttered for the better part of two weeks and daily withdrawals from ATMs have been limited to a paltry 60 euros. The economy is in freefall and the country faces a raft of big debt repayments.

Early Saturday, Greek Prime Minister Alexis Tsipras cleared one hurdle. Lawmakers in the Greek parliament overwhelmingly backed a package of economic reforms and further austerity measures, in the hope that it will convince its European partners to back a third bailout of the country. Greece has made a request to Europe's bailout fund for a 53.5 billion-euro ($59.5 billion) 3-year financial package.

Still, the measures proposed, which include changes long-demanded by creditors, such as changes to pensions and sales taxes, don't appear to be enough, just yet. Following months of deteriorating relations, creditors are demanding firm legislative action to back up the proposals.

Earlier, German Finance Minister Wolfgang Schaeuble, who has taken a hard line on Greece over recent months, said the Greek government will have to do a lot more than just say it wants to reform if it's going to get more money.

"We will definitely not be able to rely on promises," he said. "We are determined to not make calculations that everyone knows one cannot believe in."

Schaeuble was clear in who he blamed for current crisis. He put that firmly on the shoulders of the radical left Syriza government that was elected in January on an anti-austerity prescription. The "hopeful" economic situation regarding Greece at the end of last year has been "destroyed by the last months," said Schaeuble who anticipated an "extraordinarily difficult" meeting.

The German finance minister was at the center of a report in Germany's Frankfurter Allgemeine Sonntagszeitung that he has proposed a temporary, five-year euro exit for Greece as a way out of the crisis. However, Theodoros Mihopoulos who heads Greek Prime Minister Alexis Tsipras' office, said in a tweet that the report "is completely denied."

Finland is perhaps taking the hardest line of all. Reports out of the country said the coalition government was balking at further assistance for Greece.

The eurozone ministers have to give their blessing to Greece's bailout request to the European Stability Mechanism. Traditionally, eurozone ministers agree by mutual consensus. The task facing the new Greek finance minister, Euclid Tsakalotos, is to convince his skeptical counterparts that Greece deserves another bailout, which would be its third in five years.

Greece has received bailouts totaling 240 billion euros in return for deep spending cuts, tax increases and reforms from successive governments. Though the country's annual budget deficit has come down dramatically, Greece's debt burden has increased as the economy has shrunk by a quarter.

The Greek government has made some form of debt relief a key priority and will hope that a comprehensive solution will involve European creditors at least agreeing to delayed repayments or lower interest rates.

French Finance Minister Michel Sapin said Europe wants to hear the nitty-gritty around Greece's proposals: "How are you going to do it? At what moment are you doing to do it? At what tempo are you going to do it."

___

Menelaos Hadjicostis in Brussels contributed to this story.

Read more at The Huffington Post

Greece's Reform Proposal Welcomed By Creditors, But Leftists Wary Of More Austerity

Greek prime minister Alexis Tsipras is applauded by lawmakers before addressing his parliamentary group meeting at the Greek Parliament in Athens on July 10, 2015. (LOUISA GOULIAMAKI/AFP/Getty Images) | LOUISA GOULIAMAKI via Getty Images

ATHENS, Greece (AP) — Greek lawmakers braced for an all-night parliament session Friday as the country's prime minister sought to rally support for tough austerity measures designed to win approval for a third bailout.

The proposed measures, including tax hikes and cuts in pension spending, are certain to inflict more pain on a Greek public who just days ago voted overwhelmingly against a similar plan.

But the new proposal, if approved by Greece's international creditors, will provide longer-term financial support for a nation that has endured six years of recession.

The government was asking for lawmakers' endorsement to use the proposed measures as a basis for negotiation.

If approved, Greece would in turn get a three-year loan package worth nearly $60 billion (53.5 billion euros) as well as some form of debt relief — far more than the 7.2 billion euros creditors had been offering during the previous five months of fruitless negotiations.

Greece's latest proposal was sent to rescue creditors who were to meet this weekend to decide whether to approve it. The country has relied on bailout funds since losing access to financing from bond markets in 2010.

In an unusual move, Prime Minister Alexis Tsipras called Friday's emergency parliament session to try win the backing of reluctant members of his left-wing Syriza party — essentially asking them to sign off on measures that seem like a U-turn after more than 60 percent of voters opposed more austerity in last Sunday's referendum.

Procedural issues led to the start of the debate being delayed until midnight, with a vote expected in the early hours of Saturday.

The coalition government has 162 seats in the 300-member parliament and pledged backing from a large section of opposition lawmakers. But a significant loss of votes from his own government could topple Tsipras' coalition.

Greece's major creditors — the International Monetary Fund, the European Central Bank and other eurozone nations — were already fine-combing through the proposals before sending them to the other 18 eurozone finance ministers Saturday. A summit of the full 28-nation European Union in Brussels was to consider them on Sunday, with hopes for a deal before midnight.

French President Francois Hollande gave the measures a swift thumbs-up, calling them "serious and credible," though Germany refused to be drawn on their merits. France's Socialist government has been among Greece's few allies in the eurozone during the past months of tough negotiations, with Germany taking a far harder line.

Jeroen Dijsselbloem, the Dutch finance minister who chairs the meetings of the eurozone finance ministers known as the eurogroup, said the proposals were "extensive" but would not say whether he considered them sufficient.

Greek Prime minister Alexis Tsipras attends a meeting at the Greek parliament in Athens on July 10, 2015. (AFP/Getty Images/Louisa Gouliamaki)

As the government inched closer to a deal to ensure Greece isn't jettisoned out of Europe's joint currency, some Greeks were furious at the proposed measures.

"If this is Europe, then we don't want this Europe," said Aristidis Dimoupulos, a marketing professor in Athens. "If this is the eurozone, we don't care if we go out or in. If in this life we'll be slaves, it's better to be dead."

Others adopted a wait-and-see approach.

"I don't know. The chances are 50-50" for a deal, said Athens resident Omiros Fotiadis.

Meanwhile, banks remained closed since the start of last week and cash withdrawals were restricted to 60 euros ($67) per day. Although credit and debit cards work within the country, many businesses refuse to accept them, insisting on cash-only payments. All money transfers abroad, including bill payments, were banned without special permission.

Alternate Finance Minister Dimitris Mardas said the banks would be gradually restored to operation. They are set to remain closed through at least Monday, at which time he said a new order would be issued expanding what transactions can be carried out.

Experts said it was unlikely, even in the event of a deal, that limits on cash withdrawals and transfers would be lifted completely for some time.

Several thousand anti-government protesters demonstrated in central Athens Friday night in a communist-backed rally.

The main governing party, Syriza, a fractious coalition of left-wing groups, had resisted a new loans-for-austerity deal, arguing the country is too weak to endure it with a quarter of the labor force out of work and a growing number living in poverty.

But it was forced to resume talks with creditors as Greek banks faced the prospect of collapse within days if the country did not receive a new rescue package.

In return, the government said it would seek debt relief — likely in the form of lengthened repayment periods and lowered interest rates — a notion that was gaining ground internationally despite reluctance in Germany.

"The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation," European Council President Donald Tusk said after the Greeks submitted their proposals Thursday.

German Finance Minister Wolfgang Schaeuble also signaled some kind of debt relief would be discussed over coming days.

But in a note of caution, he added: "The room for maneuver through debt re-profiling or restructuring is very small."

A pedestrian walks by a poster depicting German Finance Minister Wolfgang Schaeuble and reading "5 years he drinks your blood, tell him NO," ahead of the July 5 referendum, in Greece on July 2, 2015.

___

Associated Press writers Anna Psaroudakis in Athens, Angela Charlton in Paris and Mike Corder in the The Hague, Netherlands, contributed to this report.

See more at The Huffington Post

Mood brightens after latest Greek offer to creditors

A new Greek offer for a cash-for-reforms deal raised hopes of an agreement as euro zone leaders prepared for an emergency summit on Monday, with EU officials welcoming the proposals as a "good basis for progress" to avert a default by Athens.

European shares surged and the Greek stock market jumped nearly 7 percent on hopes that the government could finally end months of wrangling that have left the country on the verge of bankruptcy and possibly being pushed out of the euro bloc.

In a sign of the more positive mood music, EU Economic Commissioner Pierre Moscovici said he was "convinced" that euro zone leaders would find a resolution on the basis of the latest proposal by Greek Prime Minister Alexis Tsipras.

The contents of the new offer have not yet been officially divulged, but Greek officials say it acquiesces to some of the demands from Greece's EU and IMF lenders for tax hikes, curbing early retirement and other spending cuts to ensure Athens hits budget targets.

In Brussels, European Union officials said Greece is offering to raise the retirement age gradually to 67 and make value-added tax reforms. A final deal was unlikely on Monday, but this could be a step toward an agreement in the coming days, they added.

Greece must repay a 1.6 billion euro loan to the International Monetary Fund next week but is likely to default without a deal with its creditors.

Tsipras heads into a series of talks with figures including European Central Bank President Mario Draghi and IMF head Christine Lagarde before the summit in Brussels of euro zone government heads at 7 pm.

Underlining the urgent need for a deal on Monday, Greece's central bank last week warned lenders to brace for a "difficult day" on Tuesday if the summit ended without a breakthrough, banking sources have told Reuters.

The country could be forced to impose capital controls within days to stem the outflow of billions of euros from banks by savers fearing they could be stuck with a sharply devalued new currency should Greece be forced out of the euro.

"We are moving in the right direction, we have solid ground for a deal, we just have to consolidate that today," Moscovici told Europe 1 radio, adding Monday would be "decisive". "I think that the political will of everyone to preserve the euro, this common good, to ensure that this single currency is irreversible, will win the day."

There were no immediate long queues or signs of panic outside Greek banks in the capital on Monday. The ECB, which has kept local lenders afloat with infusions of liquidity, raised its emergency funding once more.

"I believe there will be a deal today. This is a normal visit to the bank," said one Greek saver outside a bank branch.

An exit from the euro would create economic dislocation in Greece and severe consequences for its banks' liquidity and solvency, which could lead to the banking system being nationalized, credit ratings agency Moody’s warned in a report on Monday.

TAX-EVADING BILLIONAIRES

Comments by Greek Deputy Labor Minister Dimitris Stratoulis on a morning news show underscored the tightrope Tsipras must walk to reach an agreement that will win over both the creditors and his own leftist Syriza party.

"We are not afraid of blackmail, and our priority is the public interest," Stratoulis, a Syriza hardliner, told Antenna television. "Let's see if there will be a deal tonight."

Syriza stormed to power in January promising to roll back years of austerity it says has worsened Greece's plight. Thousands gathered in central Athens on Sunday to protest against a new round of cuts, which is expected to be countered by a demonstration in favor of staying in the euro later on Monday.

The mood had also hardened among the creditors in recent weeks. Chancellor Angela Merkel of Germany, which has spent more money bailing out Greece than any other country, is under pressure from taxpayers, business leaders and within her own ranks not to go soft on Greece.

"The Greek government needs to finally do something," German Economy Minister Sigmar Gabriel told the mass-selling German newspaper Bild. He added he was sure Merkel would "not sign anything which allows Greek billionaires to continue evading taxes and mean that workers and pensioners in Germany have to pay even more as a result".

Greek Prime Minister Alexis Tsipras waves hand as he gets into a car after a wreath-laying ceremony at the statue of Russian-born founder of modern Greek state Ioannis Kapodistrias in St. Petersburg, Russia, June 19, 2015. Photo by: Reuters/Maxim Shemetov

The chief-of-staff of European Commission President

Jean-Claude Juncker had spoken of a "forceps delivery" as officials worked late into the night on Sunday to produce a deal before the emergency summit.

European ministers had earlier played down the prospect of a final agreement on Monday but hope a political understanding can be reached in time for a full deal by the end of June.

"Lithuania's position is quite strict ... we see a state which wants to be able to feast, and it wants for all others to pay for that feast," Lithuania's president Dalia Grybauskaite told public radio. "Greece is trying to make others help them, but they don't expect to take any responsibility at all."

Source: Reuters