segunda-feira, 15 de junho de 2015

Greek default fears rise as ‘eleventh-hour’ talks collapse / VÍDEO: Greece's explosive week

Greek default fears rise as ‘eleventh-hour’ talks collapse
Peter Spiegel in Brussels and Kerin Hope in Athens

Talks aimed at reaching an 11th-hour deal between Greek ministers and their bailout creditors collapsed on Sunday evening after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations.
The breakdown is the clearest sign yet that differences between the two sides may be too wide to breach, increasing the possibility that Athens will not secure the €7.2bn in bailout aid it needs to avoid defaulting on its debts — including a €1.5bn loan repayment due to the International Monetary Fund in just two weeks.
Greek negotiators, including Nikos Pappas, aide-de-camp to Prime Minister Alexis Tsipras, left the European Commission only 45 minutes after entering.
A commission spokesman said there remained a “significant gap” between the sides, amounting to up to €2bn per year, and there was no longer time to reach a “positive assessment” of Greek efforts before a meeting of eurozone finance ministers on Thursday.
“While some progress was made, the talks did not succeed,” said the spokesman. “On this basis, further discussion will now have to take place in the eurogroup.”
The eurogroup meeting is seen by many officials as the last chance for Athens to secure agreement on a list of economic reforms its creditors are demanding in order to release the €7.2bn before Greece’s EU bailout runs out at the end of the month.
Without the endorsement of Greece’s trio of bailout monitors — the commission, the International Monetary Fund and the European Central Bank — the chances of an amicable agreement on Thursday are remote, raising the prospect eurozone negotiators may resort to the “take it or leave it” strategy used on Cyprus at a eurogroup meeting two years ago.
On that occasion, an ECB representative warned that without a deal, it would be forced to cut all emergency funding to Cypriot banks — essentially laying waste to the country’s financial system. The ECB has faced pressure in the past week to take the same stance with Athens.
One senior official involved in the talks said there could still be a compromise on Thursday if Greek negotiators “go back to Athens and say, ‘Oh shit, we have to do something’.” But the official acknowledged such a U-turn was unlikely.
Yannis Dragasakis, deputy prime minister and head of the negotiating team in Brussels, said after the talks broke up that Athens remained “ready” to complete the negotiations and blamed Greece’s creditors for being intransigent in their insistence on pension cuts and increases in the country’s value added tax that Athens believe will hit essential services.
“In spite of the presence of the Greek mission in Brussels, there was no response on the part of the [bailout monitors] for discussions at the same [political] level or authorisations that would permit a solution to the issues that remain open,” Mr Dragasakis said.
In a sign of how far attitudes had shifted, Sigmar Gabriel, Germany’s vice-chancellor and head of the country’s Social Democratic party — long seen as a more conciliatory political group — penned an article for Monday’s daily Bild newspaper in which he warned patience towards Greece in Germany was running thin.
“The game theorists of the Greek government are in the process of gambling away the future of their country,” Mr Gabriel wrote, in a thinly veiled dig at Yanis Varoufakis, the Greek finance minister who is an expert on game theory. “Europe and Germany will not let themselves be blackmailed. And we will not let the exaggerated electoral pledges of a partly communist government be paid for by German workers and their families.“
The Sunday night talks were scheduled after Greek ministers, who had travelled to Brussels on Saturday, were told their final plan had to be submitted by the end of the weekend.
According to a Greek government official, the new Athens counterproposal included no new cuts in public sector pensions or increases in taxes on electricity — positions that have been rebuffed by creditors for weeks.
For nearly two weeks, creditors have been asking Athens to come back with a counterproposal that would fit within a broad programme outline that sets a gradually increasing set of budget surpluses.
Under the creditors’ plan, Athens would need to find measures to hit a primary budget surplus — revenues less expenses when interest on sovereign debt is not counted — of 1 per cent of gross domestic product this year, rising to 2 per cent next year and 3 per cent in 2017. By 2018, the primary surplus would need to hit 3.5 per cent.
Athens has objected to pension cuts and energy tax increases, and has countered with a slower path to the 3.5 per cent target in 2018: 0.75 per cent this year, 1.75 per cent next year and 2.5 per cent in 2017.
A commission spokesman said the differences remained at about 0.5-1 percentage point of GDP per year.
The impasse prompted the IMF on Sunday to take the unusual step of going public with a justification of its demands on both sides.
Both Greece and its European creditors needed to make “tough choices, and tough commitments,” wrote Olivier Blanchard, the outgoing chief economist.
“We are open to alternative ways for designing both the VAT and the pension reforms, but these alternatives have to add up and deliver the required fiscal adjustment.”
But he added that European creditors also needed to agree to “significant additional financing, and to debt relief.”
Any relaxation of the surplus targets offered to Greece in the creditors’ latest offer would require eurozone governments to write down a portion of their bailout loans in order to ensure Greek debt started coming down to sustainable levels.
“We believe that, under the existing proposal, debt relief can be achieved through a long rescheduling of debt payments at low interest rates,” Mr Blanchard wrote. “Any further decrease in the primary surplus target, now or later, would probably require, however, haircuts.”
Additional reporting by Chris Bryant in Frankfurt

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