Greece is striking out at every turn with its creditors, some of whom used a G-7 conference to deliver a big slapdown, world press reports said.
Greece Told Strike Deal or Face Consequences
The Telegraph – Marion Dakers
Greece’s creditors are losing patience with the country’s uncompromising stance on its debt obligations, with the heads of the European Parliament and Commission calling on Alexis Tsipras’s government to find common ground for a deal or face “dramatic consequences”.
Jean-Claude Juncker, President of the Commission, has vented his frustration at Mr Tsipras for rejecting the lenders’ proposals last week without telling his parliament that sticking points such as income support for pensioners had been put on the table for negotiations.
“He didn’t tell parliament that we did address that subject already,” said Mr Juncker, adding that he is yet to receive a revised proposal from the Greek leadership following Mr Tsipras’ “disappointing” comments.
“I don’t have a personal problem with Alexis Tsipras, quite the contrary. He was my friend, he is my friend. But friendship, in order to maintain it, has to have some minimum rules,” he said at the G7 summit in Germany.
Meanwhile, the President of the European Parliament has put further pressure on Greece to agree a deal with its international creditors and unlock rescue funding, warning of “dramatic consequences” if the indebted country resists compromise.
Martin Schulz told the Welt am Sonntag newspaper that the anti-austerity ruling party Syriza has a responsibility towards the rest of the European Union, not simply its own voters.
Mr Tsipras took a defiant stance on Friday by postponing a €300m payment to the International Monetary Fund and describing the latest reforms and funding proposal from the troika of lenders as an “unpleasant surprise” and “absurd”.
Mr Schulz echoed Mr Tsipras’s foreboding tone about how quickly Europe needs to come to an agreement. “Time is running out and the consequences would be dramatic,” he said, warning Greece against “turning down the outstretched hand again”.
He has also suggested over the weekend that if Greece were to depart from the eurozone, it would spell “automatic exit from the EU”.
Greece’s finance minister Vanis Varoufakis has made a fresh push for debt relief as part of the revised package. “As finance minister, I’ll refuse to put my signature on a deal” like the one currently on the table, Mr Varoufakis told Proto Thema newspaper. “We will not sign a deal that extends this self-feeding crisis of the last five years.”
EU Leaders Grow Frustrated With Greece
The New York Times – Alison Smale
World leaders on Sunday increased the pressure on Europe to resolve the crisis over Greek debt, hours after one of the chief European negotiators expressed exasperation with how the Greek leader was handling the talks.
Chancellor Angela Merkel of Germany, host of the Group of 7 summit meeting in the Bavarian Alps, told the public broadcaster ZDF that she and the French president, François Hollande, had spoken to Prime Minister Alexis Tsipras of Greece by telephone late Saturday and had briefed other leaders attending the gathering on the conversation.
“We can’t say yet that the problem is solved,” Ms. Merkel told ZDF. “We are working flat out,” she added, but said that any deal requires Europeans to bind together to help each other, as well as individual efforts from member states.
President Obama also intensified pressure for a resolution, with the White House warning that a failure by Europe to reach a deal could spark broader financial instability around the globe.
In a private meeting by Mr. Obama and Ms. Merkel on the sidelines of the summit, the two agreed “that it was important for Greece and their partners to chart a way forward that builds on crucial structural reforms and returns Greece to sustainable long-term growth,” Josh Earnest, the White House press secretary, said on Sunday.
“There obviously is a deadline that’s looming,” Mr. Earnest added, saying the president was hopeful that Greece would pursue such changes “without causing undue volatility in the global financial markets.”
Earlier Sunday, Jean-Claude Juncker, president of the European Commission, the executive arm of the European Union, accused Mr. Tsipras of failing to disclose important details of the proposal made by Greece’s creditors when he addressed Parliament on Friday.
Mr. Juncker said he wanted Greece to remain in the euro currency zone but could not “pull a rabbit out of the hat.”
Greece has until the end of the month to work out a deal with the European Commission, the European Central Bank and the International Monetary Fund, or it could default on its debt. The three entities lent Greece $240 billion in 2010 and 2012. On Friday, Greece delayed a deadline for a debt repayment to the I.M.F., buying Athens more time to renegotiate its deal.
Greece’s Plans Have No Support From Creditors
Reuters – Jan Strupczewski
Greece wants to restructure its huge public debt through cheaper refinancing, longer maturities, a write off of some principal, and turning some debt into perpetual or GDP-linked bonds, but the plans have no support in the eurozone so far.
The Greek government spelt out ideas on how to restructure the debt, which is at 175% of GDP, in two documents submitted to its creditors last week.
A restructuring has been one of the key demands from Greece in its negotiations with creditors on new financing, but until now Athens has never quite explained what it meant.
The eurozone, which holds most of the debt, does not even want to start discussing any form of debt relief before Greece implements reforms promised in exchange for the money it has already received, on which talks are deadlocked.
“Greece has to focus on the completion of the program — that’s a mutual priority, debt restructuring is not on table,” Slovak Finance Minister Peter Kazimir said on Twitter.
The eurozone has explicitly ruled out any write-off of principal, though governments are considering a further extension of maturities on existing loans.
The Greek approach is ambiguous, not least because the two documents present different schemes, one more ambitious than the other.
A seven-page paper called “Ending the Greek crisis”, leaked to the Financial Times, goes beyond a 47-page document entitled “Agreement on the economic policy, the reforms of the period 2015-2020″, published by Germany’s Der Tagesspiegel last week.
In the longer document, Athens does not ask for any existing loans to be written off, or even to have their maturities extended.
Instead, it aims to use cheaper loans from the eurozone’s ESM bailout fund to buy back 27 billion euros of its most expensive bonds held by the European Central Bank — effectively rolling-over the debt on more favorable terms.
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