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The truth behind the contradictiosn between these two reports will become apparent
'Agreement' over Greek crisis reached - EC President
Published
time: July 13, 2015 06:51 (04.51 BST)
Eurozone
leaders have reached an ‘agreement’ over a third bailout for
debt-ridden Greece, which has been trying to reach a compromise for
about five months.
EuroSummit has unanimously reached agreement. All ready to go for ESM programme for#Greece with serious reforms & financial support
— Donald Tusk (@eucopresident) July 13, 2015
Was this an earlier report?
Greek
debt crisis: Tsipras resists key bailout measures after 15 hours of
talks
Talks
stall on two points: IMF involvement in a new three-year bailout and
a German demand for Greece to give up €50bn in public assets as
collateral
14
July, 2015 06.13 BST (08.13 Moscow time)
A
marathon overnight negotiation between Greece and
its creditors remained unresolved on Monday morning after European
leaders confronted Alexis Tsipras, the Greek prime minister, with a
package of austerity measures which entailed a surrender of fiscal
sovereignty.
A
weekend of high
tension that
threatened to break Europe in two climaxed on Sunday at a summit of
eurozone leaders in Brussels where the German chancellor, Angela
Merkel, and the French president, François Hollande, presented
Tsipras with an ultimatum.
The
ultimatum – debated over more than 15 hours – entailed a series
of draconian measures as the price of avoiding financial collapse and
being ejected from the single currency bloc.
Tsipras
acquiesced in most of the fiscal rigour demanded of him in four pages
of summary instructions drafted by eurozone finance ministers.
But
as Monday morning broke over Brussels, he was still resisting the
creditors’ demands on two key points: on having the International
Monetary Fund (IMF) involved in a proposed new three-year bailout,
and on a controversial German demand for Greece to park €50bn
(£36bn) in assets outside Greece, probably in Luxembourg, to serve
as collateral for fresh loans and to provide privatisation proceeds
to be used for debt servicing,
Greek
officials insisted that €17bn (£12.2bn) worth of assets was as far
as they could go.
The
severity of the eurozone terms being applied to a country on its last
legs shocked Greeks.
It
remained to be seen how Tsipras would be received when he returned
home from the climactic negotiations of the five-year debt crisis.
Social
media sites throbbed with outrage. The
hashtag #ThisIsACoup soared
to the most trending in Europe, in Greece but also in Germany where
Der Spiegel described Berlin’s demands of Athens as a “catalogue
of horrors”, and to the second-highest trending worldwide.
In
what a senior EU official described as an “exercise in extensive
mental waterboarding” to secure Greek acquiescence to talks on a
third bailout in five years worth up to €86bn (£62bn), Merkel and
Hollande had pressed for absolute certainty from Tsipras that he
would honour what was on offer.
Under
the terms set before Tsipras, the Greek parliament has to endorse the
entire package on Monday and then pass several pieces of legislation
by Wednesday, including on pensions reform and a new VAT regime,
before the eurozone will agree to negotiate a new three-year rescue
package.
The
terms are much stiffer than those imposed by the creditors over the
past five years. This, said the senior official, was payback for
the emphatic
no to the creditors’ terms delivered by the snap referendum that
Tsipras staged a week ago.
“He
was warned a yes vote would get better terms, that a no vote would be
much harder,” said the senior official.
The
Eurogroup document said experts from the troika of creditors – the
IMF, European Commission and European
Central Bank –
would be on the ground in Athens to monitor the proposed bailout
programme. The trio would also have a say in all relevant Greek draft
legislation before it is presented to parliament. Furthermore, the
Greeks will have to amend all legislation already passed by the
Syriza government this year that had not been agreed with the creditors.
While
Greece’s fate was being debated in Brussels, in Athens the ruling
leftwing Syriza party was showing signs of disintegration. Demands
that the reforms be approved by the Greek government and put into law
by Wednesday were described as “utter blackmail” by leading party
members and met with disbelief.
Although
sources close to Tsipras said the leader was determined to do
whatever was needed to keep Grexit at bay, political tumult also
beckoned. Insiders conceded that a cabinet reshuffle – removing
ministers who had refused to vote the austerity package through
parliament early on Saturday – could come as early as Monday.
By
late Sunday night it had become clear that Tsipras’s U-turn on
measures he had once spurned had produced a potentially far-reaching
split. In addition to 17 MPs breaking ranks at the weekend –
stripping his government of a working majority – 15 other lawmakers
also indicated they would not approve the agreement in its entirety.
The resistance raises the spectre of Tsipras being forced to call
fresh elections – a move described as potentially catastrophic for
the country.
“Greece
can bend up to a point,” said Aristides Hatzis, a prominent
political commentator. “But after that there is no bending, only
breaking.”
Although
billed as the
last chance to secure “the ultimate agreement” on
the Greek debt crisis, the prospects of a grand political bargain to
keep Greece in the eurozone are far from assured.
Entering
the leaders’ meeting, Tsipras said
he was looking for compromise: “We can reach an agreement if all
parties want it.”
But
France and Germany are split
on their approach to the Greek question,
while Finland could refuse outright to sign up to a third bailout for
Greece.
France’s
Hollande vowed to do everything possible to get an agreement on
Sunday night, but Merkel said
there wouldn’t be an agreement at any cost.
Other
eurozone countries urged Germany to
drop its objections. “Grexit has to be prevented,” said Jean
Asselborn, Luxembourg’s foreign affairs minister. “It would be
fateful for Germany’s reputation in the EU and the world.
“Germany’s
responsibility is great. It’s about not conjuring up the ghosts of
the past,” he told German newspaper Süddeutsche Zeitung. “If
Germany goes for Grexit, it will trigger a deep conflict with France.
That would be a catastrophe for Europe.”
Italy’s
prime minister, Matteo Renzi, was expected to tell Merkel at the
leaders’ meeting that “enough is enough” and the eurozone
should not humiliate Greece when
it had already given up so much.
Earlier
on Sunday, eurozone finance ministers said they had made some
progress after 14 hours of talks over two days and failing to reach
any agreement on Saturday. “We have come a long way, solved a lot
of issues, but some big issues still remain,” said Jeroen
Dijsselbloem, who chairs the Eurogroup of finance ministers.
Donald
Tusk, the president of the European Council, cancelled an emergency
full summit of the 28 countries that was to deal with the fallout
from Greece’s ejection, in order to give eurozone leaders a last
chance to reach an accord saving Greece and
forestalling what would be a devastating schism, sowing deep
resentment and division between Europe’s leaders.
The
intractable problem is that many governments do not trust the Greek
government to implement a €12bn (£8.6bn) programme of spending
cuts and reforms that will be delivered as part of a bailout.
Eurozone governments are seeking proof from Athens it can keep its
promises, in exchange for agreeing to start talks on a deal.
“The
main obstacle to an agreement is trust,” said Italy’s finance
minister, Pier Carlo Padoan, one of the countries most sympathetic to
Greece.
The
Irish taoiseach, Enda Kenny, urged his fellow leaders to “look at
the bigger picture”. Kenny, who has been Ireland’s leader since
the early days of its own bailout programme, said in his country’s
case trust was built incrementally.
“We
don’t want to look back in 10 years’ time and think this could
have been saved, but wasn’t,” he said.
Der
Spiegel called Sunday the biggest day of Merkel’s 10-year
chancellorship and appealed to her to “show greatness” and
save Europe.
If
Der Spiegel was right about the momentousness of Merkel’s day, the
same could be said for Hollande of France who,
with his government and officials, has been campaigning tirelessly in
recent weeks to keep Greece in the euro, helping Athens to draft its
proposals.
A
decision to go ahead with a so-called Grexit, which has never been
closer, would be a shattering failure for Hollande and the resulting
Franco-German recrimination would be deeply damaging, say observers.
- EU leaders have reached agreement that paves the way to a third Greek bailout, if Athens parliament approves tough austerity measures`
- Tusk: We have an a Greekment
- Merkel: No need for Plan B
- Dijsselbloem: Greek parliament must vote measures now
- Summary: a long night of deadlock
- Tsipras faced ‘mental waterboarding’ to accept deal
