Greece keeps Europe waiting

19 Eurozone leaders meet in Brussels for what may be last chance to avoid Grexit

Greek Prime Minister Alexis Tsipras is expected to submit a concrete proposal today
Greek Prime Minister Alexis Tsipras is expected to submit a concrete proposal today

Greek debt negotiations are set to ramble on for weeks after the new Greek finance minister failed to put forward a tangible proposal as the 19 Eurozone leaders and finance ministers met in Brussels yesterday.

Speaking before the summit begun, Prime Minister Joseph Muscat said the meeting was looking like a “waste of time” after Greece failed to put forward a concrete plan.

“We expected to hear Greek proposals today but they told us that they will present them tomorrow instead. We are starting on the wrong foot,” Muscat told journalists.

Greece avoided a head-on collision with German chancellor Angela Merkel by promising to put its economic proposals in writing after being warned that “only a few days” are left to reach a deal.

Greece is expected to submit a formal request for a medium-term assistance programme from the European Stability Mechanism (ESM) rescue fund and Eurozone finance chiefs will discuss Greece’s request in a conference call this morning.

Earlier, finance minister Edward Scicluna said the new Greek finance minister Euclid Tsakalotos was a “breath of fresh air” and exhibited “a positive” attitude in his briefing.

However, Scicluna added, the Eurogroup was left frustrated after yet another failure on Greece’s part to submit a plan. 

The rapprochement mitigates the danger of the European Central Bank pulling the plug on Greek banks, which are bleeding cash and have been shut for seven business days.

Greece’s failure to propose a written plan was met with a tide of skepticism before yesterday’s extraordinary summit, with Merkel saying that “the path we have to take isn’t possible without reforms.” 

Dutch Prime Minister Mark Rutte pronounced himself “somber” and Finnish Prime Minister Juha Sipila said he was “quite pessimistic about the situation.” However, Italian prime minister Mattei Renzi sounded more optimistic than other leaders and said a deal with Greece can be found in the hours ahead. Renzi also cautioned, though, that Europe needs more than a mere ‘technical solution’ to the crisis.

Although no plan was forthcoming from Athens, a Greek government official acknowledged that it would be making some “improvements” to the bailout proposal it submitted last week. The measure will cover economic reforms, investment and debt settlement, the official said. 

Greece will make a proposal to tap into the European Stability Mechanism - Europe’s bailout fund by today, Eurogroup president  Jeroen Dijsselbloem said at the end of a meeting of the Eurozone’s 19 finance ministers on Tuesday.

Dijsselbloem also confirmed that the new Greek finance minister, Euclid Tsakalotos, failed to put forward any written proposals for a bailout deal to avoid a Grexit. 

The Dutch finance minister also told reporters he “broadly agreed” that Greece is in need of more than a short-term financial fix.  “The ministers also broadly agreed that if there is to be another ESM program with support it would have to be a medium term program for reasons of credibility,” he said. 

Dijsselbloem added that the eurozone would have to assess Greece’s financial situation before deciding whether to start talks on a possible new aid programme. 

Greek Prime Minister Alexis Tsipras met Merkel, French President Francois Hollande and European Commission President Jean-Claude Juncker before yesterday evening’s summit and is expected to address the European parliament today. 

Following Sunday’s resounding victory in the referendum held over the creditor’s proposals, Tsipras will reportedly demand that his country’s €323 billion debt be cut by up to 30%, with a 20-year grace period. Meanwhile, senior EU sources said that another summit, this time involving all EU leaders and not only the Eurozone members, will be held on Sunday to approve a plan to aid Greece if creditor institutions are satisfied with a Greek loan application and reform plan which may be submitted this week.