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Greece Teeters On Brink Of Debt Default: ECB Crisis Talks Expected

The European Central Bank (ECB) has scheduled emergency talks as Greece faces what seems an almost inevitable debt default. Amid the crisis, the German Deputy Chancellor cancelled a trip to Israel.

ECB, one of Greece’s three international creditors along with the International Monetary Fund (IMF) and the European Commission, was expected to hold talks on Sunday on whether to extend a crucial financial lifeline to Athens after its bailout package expires onJune 30.

The ECB could play a critical role in aiding Greek banks to stay open in the face of massive withdrawals by Greeks who fear that capital controls could be introduced if the country defaults on its debt.

Greece’s debt crisis reached a head on Saturday after eurozone finance ministers refused a request from Athens to extend a bailout deal until after a referendum called by Prime Minister Alexander Tsipras.

The Greek parliament voted in favour of the July 5 referendum lateon Saturday. Greeks will be asked to vote on whether to accept conditions stipulated by creditors on Friday in exchange for further bailout money – conditions the government itself rejects.

Without an extension or further international loans, Greece is likely to default on a 1.5 billion euro ($1.7 billion) repayment to IMF dueon Tuesday.

Greek ‘destiny’

Greece has been locked in tense negotiations with its international creditors since January, when Tsipras’ Syriza party rode to election victory on pledges to end austerity measures demanded by the EU and IMF in exchange for two bailouts worth 240 billion euros.

Top EU officials on Saturday spoke out against Greece being forced to leave the single-currency eurozone as a result of any default, with German Finance Minister Wolfgang Schäuble saying the country “remains a member of the eurozone” and “a part of Europe,” while his French counterpart Michael Sapin spoke of Greece’s “destiny” in the euro.

But Austrian Finance Minister Hans Jörg Schelling was quoted in the Sunday edition of Austrian paper “Die Presse” as saying that an exit of Greece from the eurozone, or “Grexit,” “appeared almost inevitable now,” adding, however, that this would be possible only if Athens first asked to leave the EU and other countries agreed to the request.

Cancelled Israel visit

As a sign of the gravity of the situation, German Deputy Chancellor Sigmar Gabriel, who is also economy minister, on Sunday cancelled a planned two-day trip to Israel, according to a spokesman from the Ministry for Economic Affairs and Energy.

Gabriel is now to be represented on the trip by his state secretary, Brigitte Zypries.

The deputy chancellor had been scheduled to talk with both Israeli President Reuven Rivlin and Prime Minister Benjamin Nethanyahu.

Zypries will now replace Gabriel at the opening of a special exhibition in Tel Aviv called “Made in Germany” that marks the 50th anniversary of the commencement of German-Israeli diplomatic relations.

OPINION: Tsipras Chose Ideology Over His People

 

The Eurogroup finance ministers decided to show the Greek government the door after all its provocations and broken promises. They had no other choice, according to Barbara Wesel.

By the end, the finance ministers of the Eurogroup needed no more than two hours to show their Greek counterpart the door. Yanis Varoufakis could find no one else to listen to him. Instead, the 18 other members of the currency union drew the consequences of the actions of his government.

Up until then, they had shown Athens Buddhist levels of patience, and allowed themselves to be dragged back to Brussels five times in 10 days, only to meet the inflexibility of the radical group from Greece. Alexis Tsipras and his ministers seemed to think they could not only lead the Eurogroup round the circus, but impose their own will on it. Or did the prime minister and his Syriza party not want a result at all? The majority of the finance ministers came to the conclusion that Athens had gone too far, and finally ended the ongoing drama. And it was high time!

Shamelessness as a political method

After the summit in Brussels, the German chancellor had called on Athens to accept the creditors’ latest offer, which she described as “exceptionally generous.” A few hours later, the answer came from Alexis Tsipras, who announced a referendum on Greek TV, and recommended that his people dismiss the offer.

Diplomatically speaking, direct democracy is pretty much the biggest act of shamelessness imaginable. Because that same afternoon, Tsipras had once again sought a private conversation with Merkel and French President Francois Hollande, where, as far as we know, he had told them nothing of his plans. There was a phone call that evening with Berlin, but that did not lessen the snub. When Merkel declared her hope that there could still be a positive result, her Greek counterpart must have already made his plan.

Great expectations

This Greek government has broken every political and diplomatic rule. This was more than simply lack of manners and revolutionary directness. The Greek representatives behaved arrogantly, without it ever being apparent what their limitless expectations were based on.

They wanted their government to be financed by the European taxpayer, without limit, and they were out to insult the other euro countries while they were doing it. It is just stupid to drive your country to the wall while caught up in your own rhetoric.

Alexis Tsipras is pulling Greece into the abyss, not because there is no other option, but out of vanity. The eurozone did not want to accede to his demands, so now he is risking dragging his country into bankruptcy and out of the euro. That is more than irresponsible, because for months polls have shown that he has no mandate to do that. If he had the wellbeing of his people at heart, he would have accepted the creditors’ last offer. That would have given him time until November to bring the economy back on track and continue negotiating. Now, he is choosing the leftist wing of his party and their ideology over his people. He will go down in history as another Greek leader who has completely failed while in office – worse than his predecessors. Barring a miracle, Greece could sink into chaos and bankruptcy. The Greek people should chase Tsipras out of office as quickly as possible.

DW.DE

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