Eurozone finance ministers have suspended their crisis talks after meeting to evaluate a last-ditch bailout proposal from Greece, according to the Finnish finance minister.
The Eurogroup of eurozone finance ministers emerged from a marathon meeting in Brussels late Saturday without an agreement on Greece’s reform proposals.
After leaving the talks, Eurogroup Chief Jeroen Dijsselbloem told reporters the negotiations were “still difficult” and that “work is still in progress.”
“We have had an in-depth discussion of the Greek proposals,” Dijsselbloem said, adding that “credibility and trust” had been discussed.
The talks are expected to resume Sunday at 11 a.m. (0900 UTC), ahead of a crucial summit attended by leaders from the 28 European Union member nations.
More to come…
Is Germany preparing for a temporary Grexit?
Germany’s finance minister is prepared to call for Greece to leave the eurozone for at least five years, a paper reported. The news comes as Athens tries to convince creditors that it can make good on reform promises.
In a position paper obtained by the “Frankfurter Allgemeine Sonntagszeitung” (FAS), German Finance Minister Wolfgang Schäuble has proposed that Athens either vastly improves its bailout-linked reform plan or take a five-year “time-out” from the eurozone, the paper wrote in an article made available ahead of publication on Sunday.
The position paper, which Schäuble sent to the other eurozone countries on Saturday, reportedly criticizes the latest round of reform proposals offered by the government of Greek Prime Minister Alexis Tsipras, saying they fail to address “vitally important reform areas to modernize the country and to boost economic growth and sustainable development in the long term,” FAS said.
A spokesperson for the German Finance Ministry would not comment on the FAS report.
The German proposal reportedly concludes that Tsipras’ latest proposals cannot serve as the basis for the new three-year loan Athens wants. Schäuble offers two alternative paths for proceeding forward: Either Greece makes some swift and comprehensive changes to its proposals, or allow Greece to leave the eurozone for at least five years and restructure its debt.
For the former solution, Schäuble suggested that Greece could, for example, transfer 50 billion euros ($56 billion) worth of assets to a trust that could be sold to reduce the nation’s debt. If they opted for the second suggestion, Schäuble reportedly wrote that they could combine the five-year “Grexit” with “growth-enhancing, humanitarian and technical support” from the European Union.
The Greek government was skeptical of the report, however. In a tweet from Alexis Tsipras’ office, Athens said the FAS report “is completely denied.”
On the same day the position paper leaked, Greece’s new finance minister, Euclid Tsakalotos, was locked in talks with creditors, trying to persuade them that the Greek government can be trusted to deliver on reform promises just a few hours after a majority in the Greek parliament threw its support behind the latest proposals.
The other 18 members of the eurozone, however, implied that it would take more than a 13-page list of reform commitments to secure a third bailout worth billions of euros.
Eurozone ministers meet for ‘extremely difficult’ Greece bailout talks
Finance ministers have met to evaluate a last-ditch bailout proposal from Greece. The reforms suggested are similar to those rejected at last week’s referendum and talks and there’s no easy solution, ministers say.
Arriving for the Saturday talks in Brussels, German Finance Minister Wolfgang Schäuble warned that there was no “easy outcome” in sight for the bailout row.
“We will have extremely difficult negotiations,” Schäuble said, adding that the numbers on Greece were “terribly bad,” and rejected Athens’ calls for reducing or rescheduling of debt.
“We know that under the EU treaties it is not possible to have debt forgiveness,” he said.
Ministers and other officials from the 19 eurozone nations were set to discuss Athens’ latest reform proposals, which were approved by the Greek parliament earlier on Saturday.
The new document includes plans for pension overhaul, tax hikes and privatizations. A third bailout for Greece is estimated to cost some 80 billion euros ($89 billion).
Greek Prime Minister Alexis Tsipras told parliament it was a “national duty to keep our people alive… we will succeed not only in staying in Europe but in living as equal peers with dignity and pride.”
He added that the deal was “marginally better” than proposals put forward by the creditors last month.
‘Issue of trust’
On the other hand, Dutch State Secretary Eric Wiebes pointed to the parallels between the latest proposal by the Greek government and the demands recently put forward by Greece’s international lenders.
“We are discussing a proposal that is very similar to the proposal that was rejected massively less than a week ago,” said Wiebes, ahead of the meeting in Brussels.
Wiebes represents the Netherlands in the meeting, as the country’s finance minister, Jeroen Dijsselbloem, is also president of the Eurogroup.
Both Wiebes and Dijsselbloem expressed concern over Athens’ commitment to reform.
“There is a major issue of trust – can the Greek government be trusted to do what they are promising in coming weeks, months and years?” Dijsselbloem said on Saturday.
‘Green light’ for Sunday
This sentiment was echoed by Austrian Finance Minister Hans Jörg Schelling, who put a chance for a new bailout deal at 60 percent, pending guarantees that Tsipras’ government would implement the proposed reforms.
“For five years, we have experienced such [reform] lists being transmitted, but the implementation of the measures never occurred,” he said.
At the same time, Italian Finance Minister Pier Carlo Padoan pointed out that the meeting’s purpose was “not about striking a deal tonight.”
“We’re here with an open mind to reach a green light, an OK, for tomorrow’s negotiations,” he said, referring to the 28-nation EU summit on Greece set for Sunday.
Previously, European Council President Donald Tusk has said the EU leaders’ meeting he is to host in Brussels Sunday is the “last chance” for Greece and the EU to seal a deal that could keep Greece from leaving the eurozone.