Following Greece’s roller-coaster ride with international lenders is not for the weak-hearted, especially if there’s money riding on it, world press reports say.
Risky Bet: Ross Roots For Greek Deal
The New York Times – Jack Ewing
The contrarian American billionaire Wilbur L. Ross Jr. made a bundle betting on the Irish banking system when it was down and out, and a similar wager on Cyprus now looks promising. But Greece may prove to be the toughest test yet of his knack for cashing in on eurozone crisis spots.
Mr. Ross, who built his career investing in distressed assets, is the ringleader of a group of investors who last year pumped 1.3 billion euros, or about $1.47 billion, into Eurobank Ergasias, the third-largest bank in Greece.
In the weeks to come, the fate of Mr. Ross’s money — along with the whole Greek financial system — may hinge on whether the country’s leftist government can avoid the chaos that would accompany an exit from the eurozone.
In the interim, Greek banks are in a perilous state. The uncertainty about the country’s future means that Greek banks cannot raise cash on the international monetary markets. Without cash, the banks cannot lend.
The result is a vicious circle in which businesses cannot get credit, hurting employment and profits and causing tax receipts to decline just when the government in Athens desperately needs cash.
No wonder Mr. Ross is rooting for the Greek government to make peace with its creditors — the International Monetary Fund, the European Central Bank and the other eurozone countries — and unlock more aid.
A debt deal seemed as elusive as ever on Tuesday, when officials in Brussels reacted coolly to revised Greek proposals meant to end a months-long standoff, saying the proposals backpedaled on fiscal targets recently agreed to by both sides.
The Greek prime minister, Alexis Tsipras, had tentative plans to meet in Brussels on Wednesday with Chancellor Angela Merkel of Germany and President François Hollande of France in another effort to break the impasse.
Whatever hardships Mr. Tsipras’s government fears under the tough terms its creditors might be demanding, Mr. Ross says Greece could have even more of a struggle trying to go it alone with a bankrupt banking system …
“A default and a removal from the euro would provoke even worse austerity than anything being proposed by the institutions,” Mr. Ross said in an interview …
Michalis Massourakis, chief economist at the Hellenic Federation of Enterprises, a Greek business trade group, said that international investors needed to be convinced that any agreement would bring lasting stability, rather than just postponing the day of reckoning.
“Greece is not a basket case,” Mr. Massourakis said. “It is only the political situation that is causing this terrible situation.”
Greece Inches Closer to Deal with Fresh Proposals
The Telegraph – Peter Spence
Greece could be edging closer to a deal with its creditors after submitting fresh proposals which are thought to include concessions on tougher austerity targets.
Alexis Tsipras, the Greek Prime Minister, has reportedly agreed to consider measures previously deemed a “red line” in the debt talks. Namely, raising the rate of VAT. “I think we’re very close to an agreement,” he told Italian newspaper Corriere della Sera.
The new plan is also said to include a variety of financing options which could tide over the embattled economy and give the country until next March to reach a final deal.
One major Greek proposal was an idea, first floated by finance minister Yanis Varoufakis, for debt held by the European Central Bank to be transferred to the eurozone’s crisis-fighting fund, the European Stability Mechanism, which is widely seen as softer, sources told AFP.
The move would delay two major payments owed by Greece to the ECB this summer, allowing Athens urgently needed breathing space.
The Greek proposals have been received by the European Commission and are said to address creditors’ concerns about Greece’s budget targets and include a proposal to ensure the sustainability of Greek debt, according to Bloomberg.
Lenders “are now in the process of studying” the proposals, say AFP sources.
Valdis Dombrovskis, the European Commission vice-president for the euro, said Greece and its EU-IMF creditors could now reach a bailout deal in the coming days, according to AFP.
“I would say that reaching the agreement within coming days is possible, it’s possible to reach a staff level agreement which then can be approved by the Eurogroup of finance ministers,” the former Latvian premier told reporters when asked about the proposals.
Greece Delivers Reform Plan, Warns Cost of Failure
Reuters – Renee Maltezou and Jan Strupczewski
European Union officials on Tuesday swiftly dismissed new Greek promises of economic reform, saying the proposals were not enough to unlock funds that Athens urgently needs to avoid defaulting on its debts.
Despite signs that Prime Minister Alexis Tsipras is adopting a more conciliatory line as time runs short for a deal, the officials in Brussels were quick to declare that Greece’s international lenders would not accept the latest proposals on tax, debt and the budget.
The chief spokesman for the European Commission said the EU executive was still studying the suggestions and stressed that other officials do not speak for the Commission.
But the EU officials passed judgment only hours after Athens announced it had sent the plan to Brussels. “What has been submitted is not sufficient to move the process forward,” said one EU official. Another said it was “not sufficient and not acceptable to member states.”
A source then said Greece was working to revise the proposals.
Athens would talk with creditors on Tuesday with the aim of narrowing differences so Tsipras can finalize a deal at a meeting in Brussels on Wednesday, the source close to the talks said.
Frustration is growing among Greece’s fellow euro zone members who have footed a large part of the 240 billion euro bill for bailing out Athens since it sank into a debt crisis in 2010.
“We will do everything to keep Greece in the euro zone … but our patience is running out,” Finnish Finance Minister Alexander Stubb said
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