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Tuesday, 7 July 2015

Greece debt crisis: 'No concrete plan' before summit

The eurozone group says that Greece has submitted "no concrete proposals" for a new bailout, at a key meeting of finance ministers in Brussels.
The eurozone had urged Greece to submit fresh plans after its people rejected a new draft bailout in a referendum.
Eurogroup head Jeroen Dijsselbloem said Greece planned to make an immediate bid for cash from a eurozone bailout fund and then set out steps for a deal.
This would not come before Tuesday evening's eurozone leaders' summit.
Separately, Greek PM Alexis Tsipras is set to address the European Parliament on Wednesday, a Greek government source said.
The Greek side gave a presentation at the finance ministers' meeting on Tuesday. However, there was no new written plan.
Mr Dijsselbloem said the new Greek Finance Minister Euclid Tsakalotos would "first of all now send us, quite quickly, a new letter requesting for European Stability Mechanism (ESM) support and following that he will present proposals from the Greek side on what the substance would look like on which we could reach an agreement".
The ESM fund was set up in 2012 to help eurozone members in financial difficulties.
However, Mr Dijsselbloem said any new ESM aid programme would only come after the eurozone had made its decisions on the state of the financial situation in Greece.
The lack of a new written plan was criticised by some in the eurozone.
Spanish Economy Minister Luis de Guindos told a Spanish reporter: "There was no proposal. We only talked about general things. And we don't have time to waste."
Malta's PM Joseph Muscat tweeted that this "doesn't help this evening's eurozone leaders' meeting".
Reflecting the level of difficulty at the meeting, another eurozone official said: "If they really plan to present something formal tomorrow, they may not find anyone to read it." 
View from Germany:, sabi-talk blog
A picture of Angela Merkel wearing an old Prussian military helmet dominates the front cover of Bild. "Today," the headline reads "we need the Iron Chancellor!" referring to Otto von Bismarck, who first held the post.
For weeks the tabloid has been leading the charge against Greece. Like many here, it has had enough. "No more billions for Greece," it urged on Tuesday.
The chancellor is under huge domestic pressure not to cave in to Greek demands for debt relief. Her deputy, Sigmar Gabriel, has said that to do so would destroy the eurozone.
And on Tuesday the CSU (her party's Bavarian ally) went further: general secretary Andreas Scheuer wants Berlin to reject further negotiations, let alone a third bailout package. The Bavarian finance minister, Markus Soeder, has said he simply wants Greece out of the eurozone.
And these are the MPs who will have to vote before negotiations over any proposed new deal can even start. Mrs Merkel says she wants to keep the eurozone together; she's got a battle on her hands at home first.


Banks closed

Mr Tsipras has been reported to want Greece's vast €323bn ($356bn; £228bn) debt to be cut by up to 30%, with a 20-year grace period.
He will meet German Chancellor Angela Merkel and French President Francois Hollande before eurozone leaders meet at a summit in Brussels on Tuesday evening, a Greek government official said.
French PM Manuel Valls said earlier that France would do all it could to keep Greece in the eurozone and that "the basis for a deal exists".
However, Germany has warned against any unconditional write-off of Greece's debt, amid fears it would destroy the single currency.
Greece's teetering banks, which have been shut for over a week, are to remain closed until at least Wednesday
The European Central Bank (ECB) is maintaining its pressure on the banks, refusing to increase emergency lending and ordering them to provide more security for existing emergency loans.
Capital controls have been imposed, with people unable to withdraw more than €60 a day from cash machines.
The European Commission - one of the "troika" of creditors along with the IMF and the ECB - wants Athens to raise taxes and slash welfare spending to meet its debt obligations.
Greece's Syriza-led left-wing government, which was elected in January on an anti-austerity platform, said creditors had tried to use fear to put pressure on Greeks.


What are the scenarios for Greece?


Mr Tsipras met Greek political party leaders on Monday to agree demands to reach a "socially fair and economically viable deal". According to Greek media, the demands include:
  • Securing liquidity for Greece's financial system
  • Credible reforms with reduced recessionary impacts
  • Strong programme for growth
  • Restructuring of Greek debt - that could mean writing some off and rescheduling repayments

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