Greece
crisis: Tsipras under pressure to submit reform blueprint to
creditors
Troika
of bailout supervisors to receive proposals from Athens by midnight
on Thursday, giving them 48 hours to examine them before summit on
Sunday
Ian Traynor in
Brussels
Wednesday 8 July
2015 17.46 BST /
http://www.theguardian.com/world/2015/jul/08/greece-crisis-tsipras-under-pressure-to-submit-reform-blueprint-to-creditors
Greece is under
intense pressure to table a last-chance blueprint for radical
economic reform, tax increases and spending cuts on Thursday in order
to secure a future in the euro and stave off financial collapse.
The reform proposals
are to be sent to Greece’s creditors with negotiations at the
critical stage. The embattled Greek prime minister, Alexis Tsipras,
accused his eurozone creditors on Wednesday of exploiting his country
as an “austerity laboratory” for the past five years while
formally asking Europe for three more years of rescue funds.
This is really and
truly the final wakeup call for Greece but also for us, our last
chance
Donald Tusk,
European council president
The countdown to
Greece’s financial collapse shifted into its gravest phase after
European leaders set Sunday as the deadline by which Tsipras has to
capitulate to their menu of cuts, tax rises and fundamental reforms
of the Greek economy in return for bailout money. Otherwise, EU
leaders said, Greece will be cut off from the eurozone, triggering
banking chaos, insolvency, and likely an exit from the single
European currency.
With the five-year
crisis entering a climactic five days, much will hinge on the details
of the reforms that Athens is to send to the troika of bailout
supervisors on Thursday. The European Central Bank, the International
Monetary Fund and the European commission are to receive the details
by midnight on Thursday, giving them 48 hours to examine them,
negotiate, and reach a verdict before another European summit on
Sunday either blesses the proposed deal or focuses on plans for
coping with a new Greek currency and how to mitigate the expected
post-euro humanitarian crisis in Greece.
Tsipras sounded
characteristically defiant in his first big speech – to the
European parliament in Strasbourg – outside Greece in almost six
months in office. He declared that justice was above the law,
repeated that his victory in securing a rejection of EU austerity in
a snap referendum on Sunday did not mean Greeks wanted to quit the
euro.
The days of treating
Greece as an “austerity laboratory” were over, he vowed. “The
experiment was not a success. Poverty has soared, and so has public
debt.
“We have now been
given a mandate to redouble our efforts in order to get a socially
just and economically sustainable solution,” he said. “Europe
will be democratic or it will have immense difficulties surviving.”
Leaders of the other
18 countries in the eurozone have been angered by Tsipras’s regular
emphasis on “democracy”, arguing that they, too, are the servants
of their own democratic public opinion and that if referendums were
held in Germany, Finland or the Netherlands, Greece would be
unceremoniously ejected from the currency rather than receiving
€240bn in loans.
Athens applied for a
new three-year loan agreement from the European Stability Mechanism,
the eurozone’s permanent bailout fund. It will need at least €50bn.
Optimistically, this will take more than a month to arrange and will
face difficult parliamentary passages, especially in Berlin. In the
short term, with Greek banks closed and fast running out of cash, ATM
withdrawals limited to a daily €60, and the government unable to
meet debt repayments, Athens also needs short-term bridging loans to
tide it through the next few weeks. It is also demanding debt relief
measures included in a new deal.
“As part of
broader discussions to be held, Greece welcomes an opportunity to
explore potential measures to be taken so that its official
sector-related debt becomes both sustainable and viable over the long
term,” said the bailout letter from the new finance minister,
Euclid Tsakalotos.
Greek crisis: New
bailout request filed; Tsipras clashes with MEPs - as it happened
The creditors’
response to the Greek plea will be determined by the raft of
austerity measures that Athens offers to commit to on Thursday when
it is also to announce pension reforms and a VAT revamp, long some of
the biggest sticking points in five months of stalemated
negotiations.
The lenders’ terms
for the new three-year rescue package, as the German chancellor,
Angela Merkel, made clear in Brussels on Tuesday evening, will be
even tougher than those rejected in last weekend’s referendum,
adding to the mood of pessimism over a breakthrough.
The breakdown in
trust between Tsipras and his eurozone partners is so severe that it
is difficult to see how it can be rebuilt in time to salvage the
situation by Sunday.
“This is really
and truly the final wakeup call for Greece but also for us, our last
chance,” said Donald Tusk, the president of the European council.
Uniquely among EU leaders, Tusk blamed both sides for the looming
disaster. “Seek help among your friends and not among your enemies.
And if you want to help your friend in need, do not humiliate him.”
The collapse in
confidence in the Greek authorities was evident in the response to
the Tsipras speech when mainstream parliament leaders assaulted the
prime minister, while the anti-EU far right, notably Marine Le Pen of
France’s Front National and Nigel Farage, the UK Independence party
leader, applauded the radical leftist.
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