BAVARIA, GERMANY – President Barack Obama spoke strongly both to Greece and it creditors/partners during a press conference at the G7 summit in Germany, but emphasized the importance of Athens implementing reforms.
“The Greeks are going to have to follow through and make some tough political choices that will be good for them long-term,” he said, but he also said the international community must recognize “the extraordinary challenges” that Greece faces,” Obama said.
Obama emphasized that Prime Minister Alexis Tsipras must implement economic reforms “three days after Prime Minister Tsipras blasted creditors for trying to force Greece into unacceptable measures,” according to the Guardian.
“German chancellor Angela Merkel warned that time is running out for Greece, and cautioned that the country must implement measures sought by lenders,” the Guardian wrote, and noted “Importantly, Merkel also confirmed she would speak with Tsipras at the EU-Latin American summit on Wednesday…President Hollande sounded more conciliatory, but also urged a deal ahead of the final deadline of 30 June.”
There are signs that Athens’ stance was softening. Two top ministers were sent to Brussels on Monday and a government spokesman insisted “Greece wants a solution that suits both sides,” but the Guardian notes that “Greek media are reporting that Athens is rejigging its 47-page list of reforms, but remains opposed to making significant changes to VAT and pensions.”
Finance Minister Yanis Varoufakis seems to be focused on mending fences with his counterpart Wolfgang Schäuble, with whom he met for a “very helpful” chat.
Varoufakis told reporters in Berlin that: “Dr Schäuble and I had a long productive conversation….We were not negotiating, we were establishing common ground…These are difficult moments for the European Union and the euro zone in particular and it is the duty of elected politicians to take their responsibility to a higher level in order to try to achieve an agreement that is absolutely essential for the integrity of the euro zone, absolutely essential for the European Union and it is a historic duty which we cannot abrogate.”
Meanwhile the Athens stock market hitting a six-week low tonight.
“The absence of a Greek deal is fuelling fears over the stability of its banking sector…Rating agency Moody’s warned today that bank deposits must have fallen again in May, on top of the €4.9bn that fled the sector in April…And this ‘significantly increases the risk’ that capital controls will be imposed, they say in a new report,” the Guardian added.
Moody’s explained: “Such capital controls could be in the form of restrictions on deposit withdrawals, such as imposing a daily limit on how much cash depositors can withdraw and on money transfers abroad.”
“Deposits last week dropped below €130bn euro, effectively wiping out the savings of the last 11 years, according to officials in the sector,” according to the Guardian