Malta ready to support Greek bailout ‘if proper monitoring framework is in place’

Malta’s red line against any haircuts for the Greek government remains but it would support a framework for close monitoring of a bailout if this is agreed to.

Finance Minister Edward Scicluna said that there were several euro area member states ready “to go along those lines”.

“If there is a framework regulating close monitoring of the bailout and a step by step assessment of the implementation of the measures, I think a lot of countries would agree to it. The Greek parliament can start legislating reforms as from this week … Our red line is the haircut. It doesn’t make sense to give a bigger bailout and write off the other one,” Scicluna told reporters in Brussels.

The monitoring programme would see experts and the institutions coming up with a framework monitoring closely the phases of the implementation programme.

“Instead of going down in the history books once again for yet another failed bailout, there should be a clear understanding that the phasing is to be shorte; Greece would earn the trust [of its creditors] ... everyone knows that a big package can never be implemented.”

Finance Ministers of the euro area are meeting in Brussels again this morning after marathon talks last night failed to produce an agreement.

Germany and Finland have made it clear they do not support a third bailout. As things stand, it is clear that it will be up to the heads of states this afternoon to decide on whether Greece is fit, trustworthy, and capable to deliver on a two-year, €12 billion savings programme of radical spending cuts and tax collection measures.

A European Council of the 28 leaders was cancelled to allow more talks among 19 of the leaders.

All hinges on whether the member states are ready to trust Greece to implement an austerity programme which it itself proposed but is harsher than the one the Greeks have overwhelmingly rejected.

Before the referendum, Greece was trying to clinch €7.2 billion – the last tranche of its bailout programme – but now the country needs a new bailout of at least €74 billion.

“The package now goes beyond what the Greeks had rejected. There are doubts and it is unfair to label countries as being in favour or against a bailout or a Grexit. Scepticism at different levels exists,” he said, noting that Greece's acceptance of a harsher programme was just "not credible".

The finance minister went on to add that even a sudden Grexit would not make sense. Greece, he said, cannot leave the euro area with a humanitarian crisis on its hands and there must be “a studied way” to assist this crisis.

“This is however absent … and many of the ministers are just as confused as the people out there.”

Leaked document shows that Germany is also proposing a five-year “timeout” for Greece to leave the eurozone so that it could have its debt restructured – which is not allowed under eurozone rules – and receive some form of humanitarian aid. According to Scicluna, this proposal was not discussed last night.

Asked whether Malta would be ready to support Germany in this plan, Scicluna said that “whatever is on the table must make sense”.

“You cannot have a package which is evident that Greece cannot meet and the more Greece accepts the impossible, the more doubts are raised.”