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BRUSSELS — Markets surged on June 22 on hopes that Eurozone leaders gathered for a last-ditch summit on Greece would reach a breakthrough that might keep the country from defaulting on its debt and falling out of the currency union.

Greek Prime Minister Alexis Tsipras presented the leaders of Germany, France and the European Union over the weekend with a proposal “for a mutually beneficial agreement, which will provide a permanent solution.”

No details of the proposal were made public, but investors were hopeful that it represented a long-awaited compromise. The Athens stock index was up 8 percent while Stoxx 50 of top European shares was 3.3 percent higher.

Greece and its international creditors, which count the Eurozone states and the International Monetary Fund, have been discussing for over four months what economic reforms the country should make before it get new loans. Greece needs money soon as it faces a June 30 debt repayment it cannot afford.

Before leaders gather the night of June 22, Eurozone finance ministers will also gather in Brussels to pore over the details of Greece’s proposal and confirm whether it meets the demands of creditors.

Amid the uncertainty over Greece’s future, Greeks have been taking their cash from banks in large amounts. Some two billion euros was withdrawn over three days last week.

“Everyone’s going (to the banks) to take money,” Yannis Nikolopoulos said in Athens. He said people are taking “some money to have at home for 10, 15 days — say 1,000, 500 euros — because if the banks shut it’ll be a problem to go shopping and that sort of thing.”

He said that a deal between Greece and its creditors “is mandatory at all costs, otherwise we’re doomed.”

Vassiliki Papanagiotou, a lawyer in Athens, urged “prudence on both sides,” warning that “otherwise Greece will collapse.”

Over the past weeks, the international creditors have often complained that detailed Greek proposals on what kind of reforms they would implement to secure the international bailout have been too slow to come and far too vague.

The new government’s different approach to the country’s bailout program — essentially denying the need for budget austerity measures which it blames for devastating the economy — has often stretched the talks near breaking point.

About 5,000 people attended a pro-government rally in central Athens the night of June 21. Pro-EU forces will gather the night of June 22 outside the Greek Parliament.

The European Central Bank has increased the amount of emergency credit it allows Greek banks to draw on to remain afloat, and remains on call in coming days to revise the amount should that be necessary, a banking official says.

The official, who spoke on condition of anonymity as the ECB had not made the decision public, declined to provide the amount.

The credit helps support Greek banks, from which worried savers have been pulling money out ahead of a critical European summit on June 22 on how to keep the country solvent.

Figures have not been officially released, but reports suggest Greeks withdrew about 4 billion euros last week.




The post Markets Rebound Ahead of Last-Ditch Summit on Greece, Secret Debt Plan appeared first on The National Herald.

Source: The National Herald
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