“We are considering the possibility of extending the loan agreement, differentiating it completely from the bailout programme / memorandum,” the same sources said.
Athens News Agency reports from Brussels, quoting unnamed Greek government sources, that Greece will request an extension until the end of August and the relevant explanatory letter which will accompany the request will be based to large degree on the European Commission’s proposals included in the so-called “Moscovici document” which was leaked to the press on Monday.
If the explanatory letter submitted satisfies Greece’s European partners, then Eurogroup President Jeroen Dijsselbloem will call an extraordinary meeting on Friday.
Eurozone sources say that for the funding of Greece’s loan agreement to continue, the country will have to accept some terms and conditions and Dijsselbloem, along with Greece’s partners, will examine whether these conditions are included in the Greek request.
The same sources said Athens does not want a rift with Europe and is willing to find a solution and that the main issue now is for the content of the request to satisfy all sides.
Speaking to his SYRIZA parliamentary group, Prime Minister Alexis Tsipras strongly criticized Germany’s stance, in particular German Finance Minister Wolfgang Schaeuble’s, hinting that the target is to undermine the government. He said that in three weeks since the general elections the people feel like they are living and breathing in a different country. The huge problems were not overcome, the wounds have not healed but the people do not feel humiliated anymore, they feel proud and dignified, he underlined.
He expressed satisfaction for the rallies held in support of the government, saying that they send a clear message to Europe that Greece is present and is giving a fight to break free from the trap of austerity and debt.
Referring to yesterday’s Eurogroup, Tsipras said that the first text was accepted in principle by the government but this was overturned by Schaeuble. He said that the German finance minister lost his self-control and spoke in a derogatory manner about the Greek people, noting that Schaeuble “should feel sorry for the peoples who walk with the heads down and not for those who hold their heads up high and demand,” adding that “he should respect and honour such peoples.”
The prime minister also criticised a cartoon published in the government-friendly newspaper Avgi, showing Schaeuble in a Nazi uniform, noting that nobody has the right, not even as a joke, to play with the ghosts of history.
Tsipras underlined that his government will implemented its policy statements and announced that the draft bill for the protection of the primary residence banning the sale of of loans to speculators will be tabled under very urgent procedures soon after the election of the new president of the republic. He also said that all election campaign pledges concerning the settlement of overdue debts to the public sector and social insurance funds in up to 100 installments will be met. Moreover, a draft bill putting an end to the labour’s dark ages and the deregulation of the labour market by reinstating the community acquis through collective labour agreements, will be tabled soon.
As regards the course of the negotiations, he said that the government moves with self-control and determination and repeated that the government wants a solution and not a rift expressing the hope that a solution will be found.
Cyprus Republic President Nicos Anastasiades spoke with Greek Prime Minister Alexis Tsipras on Tuesday on Greece’s negotiations in Europe about its fiscal programme.
Following an agreement between the two leaders, Anastasiades spoke with European Commission President Jean-Claude Juncker about the issue, the Cypriot Republic government speaker said.
“I am not saying I am optimistic, but the hope is that everyone understands what Jean-Claude Juncker included in his campaign programme – the need for growth and to create new jobs, which would replace austerity or strict austerity,” Anastasiades said, adding that Cyprus’ consistent position is to support Athens.
A negative development for Greece will not have repercussions for Greece, he said in response to questions. “The decisions of the Eurogroup in 2013 may have been the last link in the chain of repercussions for Cyprus,” he said. He also noted that the Greek bank subsidiaries in Cyprus are under constant supervision by the central bank so that Cyprus’ economy is protected.
The European Union is strongly interested in finding a solution to the Greek fiscal issue that will benefit all, Commissioner for the Euro and Social Dialogue Valdis Dombrovskis said on Tuesday in Brussels.
Speaking at a press conference after the Ecofin meeting, Dombrovskis said that Greece’s difficult reforms “bore fruit last year and it is very important that the country continues to build on that success.” Any deviation from that course would have negative repercussions, he said.
“There is strong political will to find a solution that will benefit all,” he said, “as long as it is done within the existing framework and all keep to their commitments.” He also said there is no ultimatum, but the general belief is that the best for Greece and Europe would be the extension of the current programme. There is also a willingness to address some of Greece’s concerns so that some sort of flexibility is included in the current fiscal programme, he added.
Bloomberg: Juncker push for Greek
compromise thwarted by finance chiefs
By Rebecca Christie, Corina Ruhe & Jonathan Stearns
European Commission President Jean-Claude Juncker’s 11th-hour effort to strike a deal with Greece on Monday was parried by euro-area finance ministers who sought to extend an austerity program in exchange for financial support.
Talks in Brussels ended abruptly and Greek Finance Minister Yanis Varoufakis claimed a bait-and-switch, saying Juncker’s commission offered a path forward that finance ministers then refused to put on the table. Instead, Dutch Finance Minister Jeroen Dijsselbloem offered a different statement tying Greece to its current agreement. Varoufakis rejected that proposal out of hand, and the euro weakened on the impasse.
Time is running out: The current aid agreement expires at the end of February. Failure to reach an accord could see Greece stumble out of the euro, and while Europe’s defenses are stronger than when the country flirted with exit from the single currency three years ago, a departure could ultimately trigger a flight from risk, bank runs and a downturn in European demand.
According to seven European officials with direct knowledge of the talks, the meeting quickly unraveled, sending the euro lower. The 19-nation euro lost 0.3 percent to $1.1355 on Monday, while Greece’s ASE Index fell 3.8 percent.
Dijsselbloem, who leads the finance ministers’ group, eventually halted the proceedings, saying ministers could reconvene on Friday if there’s a breakthrough.
“The next step has to come from the Greek authorities,” Dijsselbloem told reporters. “They have to make up their minds whether they will ask for an extension.”
Varoufakis said Greece had no choice but to refuse the statement on offer. “In the history of the European Union nothing good has ever come out of ultimatum,” he told reporters after the meeting.
Greece is willing to extend the current aid program as long it’s done on the right terms, Varoufakis said. Prime Minister Alexis Tsipras’s government will now return to the bargaining table and “we are ready and willing to do whatever it takes to reach an honorable agreement over the next two days,” he said.
Monday’s impasse comes a day after Juncker took a personal stake in the Greek negotiations. Tsipras requested a call with Juncker that took place as the commission chief made a “last- ditch effort” to find common ground, an EU official said Sunday.
Without a deal, Greece could run out of money by the end of March, forcing Tsipras to consider abandoning his promises to the electorate or even leaving the single currency.
Greek bond yields are being whiplashed as investors try to gauge progress. Yields on Greek three-year notes rose 174 basis points, or 1.74 percentage points, to 17.58 percent, after tumbling 220 basis points on Friday. Greece’s bonds had rallied last week as officials signaled a willingness to compromise.
Varoufakis said his government had been “happy” with a “splendid,” separate draft communique that was produced by European Economic Affairs Commissioner Pierre Moscovici before the meeting.
Moscovici, speaking after the meeting, called on euro-area finance ministers to be “logical, not ideological” as negotiations continue. He urged Greece to request an extension and said concessions so far leave ample room for a deal.
“We both agreed that it could be possible to keep 70 percent of the current program and to replace measures, but which have to be fully financed, up to 30 percent” of current requirements, Moscovici said. “Thirty percent is not a minor room for politics.”
From Athens, the Greek government lashed out at Dijsselbloem’s demands, saying it was “absurd” and “unacceptable” to ask the country to request an extension.
Euro-area officials focused on the terms of the previous bailouts “are wasting their time,” the Greek statement said. “The insistence of some circles that the new government enforce the memorandum is absurd and unacceptable.”
Austrian Finance Minister Hans-Joerg Schelling said euro- area nations must be fully on board with any aid pledges made on behalf of their taxpayers, citing public resentment toward Tsipras’s election promises.
“It’s unacceptable that Greece raises pensions funded by the other countries even as in other countries’ pensions may be just half of what’s paid out in Greece,” he said.
Some finance chiefs countered that Greece didn’t put enough specific plans on the table. Greece did not present any new data or numbers in between when finance chiefs gathered last week and Monday’s meeting in Brussels, Pierre Gramegna, Luxembourg’s finance minister, told reporters after the meeting.
“Greece finds itself now closer to a new bankruptcy within the euro and potentially” leaving the currency union, Nicholas Economides, professor of economics at Stern Business School, New York University, said in an e-mail. “Greece could run out of money in March.”
Amid all the frustration, Italian Finance Minister Pier Carlo Padoan said Greece leaving the euro zone remains “out of the question,” in comments to reporters Monday night.
“I am not worried,” Padoan said. “I am convinced that we will ultimately reach a common ground and a common decision.”
Greece has so far been promised 240 billion-euro ($274 billion) under two bailouts. Any deal might have set the stage for a follow-on aid program or credit line that would maintain oversight by the European Commission, the ECB and the International Monetary Fund.
IMF Managing Director Christine Lagarde said Greece will need to follow the rules to tap into more of its bailout. Any review would take weeks, if not months, to see if Greece could qualify for another aid disbursement, she said.
Dijsselbloem said flexibility “could commence immediately” if the Greeks ask to extend the current program. He said talks can’t take place if there’s no program or if certain areas are seen as off-limits before talks start.
“Within the program there is room to discuss,” Dijsselbloem said. As for any funds from the bailouts so far unused, “if the program expires, the money simply flows back,” he said.