Greece
Given 48 Hours to Reach Deal as EU Weighs Debt
by Mark DeenArne
Delfs
June 22, 2015 —
9:29 PM CEST Updated on June 23, 2015 — 9:02 AM CEST
New Reform Measures
Shows Greece is Getting Serious
Greek Prime Minister
Alexis Tsipras has 48 hours to bring a deal with his country’s
creditors to the finish line and end a five-month standoff over aid
that risks splitting the euro.
After a day of
marathon talks on Monday, leaders from Greece’s 18 fellow euro-zone
countries agreed that Tsipras’s government was finally getting
serious about striking a deal after it submitted a set of reform
measures that began to converge with the terms demanded by creditors.
They agreed to step up the pace of negotiations to secure a
breakthrough on Wednesday that leaders can sign off at the end of the
week.
The package of
proposals represents “a certain step forward, but it was also said
very clearly that we’re not yet where we need to be,” German
Chancellor Angela Merkel told reporters in Brussels after an
emergency summit Monday night. “Hours of the most intensive
deliberations lie ahead of us.”
Greek government
bonds rose early Tuesday, extending a rally sparked by hopes of an
imminent deal after Tsipras’s government submitted new proposals
addressing the areas of pensions and fiscal targets that had proven
the chief barriers to a deal. The yield on the 2-year bond fell 180
basis points to 22.6 percent at 9:50 a.m. in Athens.
Sticking Point
Disagreement remains
over the fine print, with revenue from sales-tax rates the chief
sticking point, according to an EU diplomat who asked not to be named
because the talks are private.
Tsipras is also
bracing for a battle at home as any agreement will have to secure
backing from the country’s parliament. The most difficult task will
be convincing hardliners in his own ruling coalition to back a deal
that would breach his Syriza party’s pledge to end austerity.
Greece Given 48
Hours to Reach Deal as EU Weighs Debt
Greek government
spokesman Gabriel Sakellaridis on Tuesday called on lawmakers from
the ruling coalition to back the plan when it comes to parliament.
“Every lawmaker has a personal responsibility to recognize and
understand not just the urgency of the moment, but the urgency of the
whole project,” Sakellaridis said in an interview with Mega TV.
Germany insists on
Greek lawmakers taking the first step by passing economic policy
changes before the German lower house will agree to a revised aid
deal.
A meeting of
euro-area finance ministers was convened for Wednesday to prepare the
ground for a second, scheduled summit of European Union leaders that
begins the following day.
Viable Solution
Negotiations with
creditors will continue over the coming 48 hours to achieve a “total
and viable solution,” Tsipras told reporters in the early hours of
Tuesday. The government aims for the country “to be able to stand
again on its feet very soon,” he said.
With the clock
ticking toward a June 30 deadline both for the expiry of the European
portion of Greece’s bailout and payments to the International
Monetary Fund, leaders stressed the work still to do in the time
available. While they didn’t discuss the IMF payment, they did
raise Greece’s future financial viability given its debt load, the
highest in Europe.
French President
Francois Hollande cited “the lengthening of maturities, or
re-profiling of the debt,” saying that “it needs to be indicated
as a forthcoming step,” albeit not in the coming days.
Merkel said that
rendering Greece’s debt sustainable wasn’t discussed in detail,
but “it became clear that this question of financial viability has
to be part of the agreement.”
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