EU Leaders Prod Greece for More to Clinch Aid Deal This Week
by Mark DeenIan WishartRebecca Christie
June 22, 2015 — 12:29 PM PDT Updated on June 22, 2015 — 1:19 PM PDT
Belgian Prime Minister Charles Michel arrives at an emergency Eurogroup heads of state meeting on Greece at European Council headquarters in Brussels, Belgium on June 22, 2015.
Photographer: Wiktor Dabkowski/picture-alliance/dpa/AP Images
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Greek Standoff: Sticking Points to a Deal
European leaders urged Prime Minister Alexis Tsipras’s government to make a final push to satisfy creditors and finally end a five-month standoff over aid.
An accord by the end of the week is “possible but it’s not yet certain,” Belgian Prime Minister Charles Michel said as he arrived for an emergency euro-area summit in Brussels. German Chancellor Angela Merkel was even less committal, saying the leaders’ meeting would be consultative only since as yet there was “no basis for a decision.”
Greek stocks and bonds surged on Monday after Tsipras’s government submitted new proposals addressing the areas of pensions, sales taxes and fiscal targets that had proven the chief barriers to a deal. That optimism was toned down by leaders amid disagreements over the fine print, including on Greek demands for some form of debt relief.
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 tiime available.
While the latest Greek document is the first serious set of proposals since the negotiations began, euro-area creditors consider it a basis for further work rather than a done deal, according to a European Union official, who asked not to be named because the negotiations are private.
“I want all cards on the table,” European Union President Donald Tusk told reporters before the summit. “It doesn’t mean I want to negotiate technical details, but it means I want to stop, to end this political gambling.”
Greek Rally
Greek stocks and bonds extended their rally on Monday, with the Athens Stock Exchange Index closing 9 percent higher for its biggest closing gain since Feb. 24. The yield on the two-year government bond fell 511 basis points to 23.8 percent, and the 10-year yield fell 150 basis points to 11.2 percent.
The rally was fed by hopes of an imminent deal after the Greek government said its proposals included steps to eliminate early retirement options, hike the sales tax, increase tax surcharges that middle- and high-income earners pay and to introduce a levy on companies with annual net income of more than 500,000 euros ($568,000).
“We are coming to these discussions aiming to strike a financially sustainable agreement,” Tsipras told reporters as he arrived in Brussels.
Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area counterparts, welcomed the package submitted by Athens as “broad and comprehensive,” even as he said it had been delivered too late for a full appraisal by ministers meeting on Monday.
‘Start Immediately’
Finance chiefs asked the three creditor institutions -- the European Central Bank, the IMF and the European Commission -- to work with Greek authorities and “start immediately on these proposals,” said Dijsselbloem. They are now likely to reconvene Thursday before a two-day leaders’ summit that will again take up Greece.
“I’m of the opinion that we’ll achieve an agreement with Greece this week,” Commission President Jean-Claude Juncker said after meeting with Tsipras. “This won’t be easy, we will work at this -- just like we did over the last two days and nights -- but my goal still is that by the end of the week we’ll find an agreement.”
Before then, officials will need to hammer out a compromise as the ECB decides whether to raise emergency funding for Greek lenders.
Hurdles Ahead
Greece’s bailout program will need to be extended in order to stop deposit outflows, according to the EU official. Finance chiefs are divided over whether the bailout would be extended for a short period to cover the disbursement of aid, or for a longer time to allow more discussion of follow-up arrangements, including a possible third bailout, the official said.
Even if he reaches a tentative agreement this week, Tsipras will still need the support of parliament in Athens, which is dominated by lawmakers from his Syriza coalition opposed to austerity measures such as pension cuts. For its part, 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.
The Greek government has “assumed its responsibilities” and is “making an effort, as they have been asked to do,” French President Francois Hollande said in Brussels. “Tonight there will be no formal decision, but it will open the way for an agreement as soon as possible.”
by Mark DeenIan WishartRebecca Christie
June 22, 2015 — 12:29 PM PDT Updated on June 22, 2015 — 1:19 PM PDT
Belgian Prime Minister Charles Michel arrives at an emergency Eurogroup heads of state meeting on Greece at European Council headquarters in Brussels, Belgium on June 22, 2015.
Photographer: Wiktor Dabkowski/picture-alliance/dpa/AP Images
New Proposals Spark Ray of Hope for Greek Deal This Week Greek Optimism Tempered by Finance Chiefs Taylor Swift Wins Streaming Battle as Apple Backs Down on Royalty Payments Greek Standoff: Sticking Points to a Deal European leaders urged Prime Minister Alexis Tsipras’s government to make a final push to satisfy creditors and finally end a five-month standoff over aid.
An accord by the end of the week is “possible but it’s not yet certain,” Belgian Prime Minister Charles Michel said as he arrived for an emergency euro-area summit in Brussels. German Chancellor Angela Merkel was even less committal, saying the leaders’ meeting would be consultative only since as yet there was “no basis for a decision.”
Greek stocks and bonds surged on Monday after Tsipras’s government submitted new proposals addressing the areas of pensions, sales taxes and fiscal targets that had proven the chief barriers to a deal. That optimism was toned down by leaders amid disagreements over the fine print, including on Greek demands for some form of debt relief.
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 tiime available.
While the latest Greek document is the first serious set of proposals since the negotiations began, euro-area creditors consider it a basis for further work rather than a done deal, according to a European Union official, who asked not to be named because the negotiations are private.
“I want all cards on the table,” European Union President Donald Tusk told reporters before the summit. “It doesn’t mean I want to negotiate technical details, but it means I want to stop, to end this political gambling.”
Greek Rally
Greek stocks and bonds extended their rally on Monday, with the Athens Stock Exchange Index closing 9 percent higher for its biggest closing gain since Feb. 24. The yield on the two-year government bond fell 511 basis points to 23.8 percent, and the 10-year yield fell 150 basis points to 11.2 percent.
The rally was fed by hopes of an imminent deal after the Greek government said its proposals included steps to eliminate early retirement options, hike the sales tax, increase tax surcharges that middle- and high-income earners pay and to introduce a levy on companies with annual net income of more than 500,000 euros ($568,000).
“We are coming to these discussions aiming to strike a financially sustainable agreement,” Tsipras told reporters as he arrived in Brussels.
Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area counterparts, welcomed the package submitted by Athens as “broad and comprehensive,” even as he said it had been delivered too late for a full appraisal by ministers meeting on Monday.
‘Start Immediately’
Finance chiefs asked the three creditor institutions -- the European Central Bank, the IMF and the European Commission -- to work with Greek authorities and “start immediately on these proposals,” said Dijsselbloem. They are now likely to reconvene Thursday before a two-day leaders’ summit that will again take up Greece.
“I’m of the opinion that we’ll achieve an agreement with Greece this week,” Commission President Jean-Claude Juncker said after meeting with Tsipras. “This won’t be easy, we will work at this -- just like we did over the last two days and nights -- but my goal still is that by the end of the week we’ll find an agreement.”
Before then, officials will need to hammer out a compromise as the ECB decides whether to raise emergency funding for Greek lenders.
Hurdles Ahead
Greece’s bailout program will need to be extended in order to stop deposit outflows, according to the EU official. Finance chiefs are divided over whether the bailout would be extended for a short period to cover the disbursement of aid, or for a longer time to allow more discussion of follow-up arrangements, including a possible third bailout, the official said.
Even if he reaches a tentative agreement this week, Tsipras will still need the support of parliament in Athens, which is dominated by lawmakers from his Syriza coalition opposed to austerity measures such as pension cuts. For its part, 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.
The Greek government has “assumed its responsibilities” and is “making an effort, as they have been asked to do,” French President Francois Hollande said in Brussels. “Tonight there will be no formal decision, but it will open the way for an agreement as soon as possible.”
