There’s been so many false warnings it’s hard to know what’s happening but it looks like Greece will either have to deal with its lenders or go under, world press reports said.
Is There Any Way Greece Can Avoid Default?
BBC – Robert Peston
Part of what divides Greece and its creditors is the detail of budget cuts and economic reforms demanded by eurozone governments and the IMF.
And the rest of the gulf is due to a monumental clash of expectations between the scope of what can be agreed by the deadline of 30 June.
What is clear both from what the Greek finance minister Yanis Varoufakis said last night and has released in his blog is that he is still arguing for a once-and-for-ever settlement – that includes a further reconstruction of Greek public sector debts to make them more sustainable.
He is arguing for a buy-out by the eurozone’s financing arm, the ESM, of the European Central Bank’s 27bn euros of loans to Greece – because the repayment schedule on these loans (or bonds) is yet another accident waiting to happen.
But although Varoufakis is doubtless right that it would be rational to pre-emptively remove this threat of probable future defaults, the eurozone is institutionally incapable of doing so at this juncture.
It completely lacks the decision-making capacity – such is the dispersal of power between the member states and their respective parliaments.
Greece Stares Into The Unknown
Bloomberg – Eleni Chrepa, Marcus Bensasson and Alessandro Speciale
Greece secured a few more days of financial breathing space from the European Central Bank, as Prime Minister Alexis Tsipras said on a visit to Russia that his country can survive its current crisis.
The ECB increased the cap on Greece’s Emergency Liquidity Assistance on Friday for the second time in three days, and will review funding again on Monday. European finance ministers will reconvene the same day before a summit of leaders that could determine the future of the euro zone and Greece’s place in it.
“We are in the midst of great turbulence,” Tsipras said in a speech in St. Petersburg, where he met with Russian President Vladimir Putin for the second time in three months. “But we are a nation of seafarers, who know how to deal with storms, and aren’t afraid to sail to distant oceans, to uncharted waters, in search of a safe harbor.”
While discussions, deadlines and apparent denouements have come and gone during almost five months of brinkmanship, the wrangling over a deal to keep Greece afloat is at the sharp end. A bailout agreement expires on June 30, the day Greece is due to make a payment to the International Monetary Fund.
“We need to get rid of any illusions that there will be a magic solution at the leaders’ level,” European Union President Donald Tusk said on Friday. “We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default.”
Greece Told: Take Deal or Default
European Council President Donald Tusk told Greece to accept a debt deal with its international creditors or face defaulting.
An emergency summit will be held on on Monday to address Athens’ future in the eurozone.
“The situation of Greece is getting critical,” Mr Tusk said in a video message.
“We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default.”
Meanwhile, the European Central Bank has raised the level of emergency funding for Greek banks by an unspecified amount following a request from the Bank of Greece, a Greek bank source said.
“There was no problem with the financing of Greek banks,” the source said, adding that bank governors were expecting a “positive result” at an emergency eurozone leaders summit on Greece on Monday.
According to state agency ANA, the funding cap was increased by €3.3 billion.
The Bank of Greece had earlier insisted that the country’s banking system was stable amid a rush of deposit withdrawals this week fuelled by fresh deadlock in Greece’s loan talks with its EU-IMF creditors.
“The governor of the Bank of Greece has confirmed the stability of the banking system, which is fully safeguarded by the joint actions of the Bank of Greece and the European Central Bank,” Greece’s central bank said.
Bank of Greece governor Yannis Stournaras had earlier met with the top Greek negotiator in European Union-International Monetary Fund talks, junior foreign minister Euclid Tsakalotos.
Greece today insisted a last-ditch deal on its debt was possible and dismissed “terror scenarios” of a default that is looking increasingly likely unless an accord is concluded.
Meanwhile, eurozone leaders will hold an emergency summit on Monday to try to avert a Greek default.
It comes after bank withdrawals accelerated and government revenue slumped as Greece and its international creditors remain deadlocked over a debt deal.
Finance ministers of the 19-nation currency bloc failed to make any breakthrough on a cash-for-reforms agreement at talks in Luxembourg yesterday.
Greece must make a crucial debt repayment to the International Monetary Fund within the next two weeks.
“Regrettably … too little progress has been made. No agreement is in sight,” Jeroen Dijsselbloem, chairman of the Eurogroup, told a news conference.
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