Looks like this could be it for Greece, with Prime Minister Alexis Tsipras defying creditor demands for more austerity and refusing to change his reforms list, world press reports say.
Greece Accused of “Breaking All The Rules”
CNBC – Holly Ellyatt
As Greece remains defiant, despite talks with its international creditors stuck in deadlock, anger and concern is mounting in Europe about the finale to this Greek crisis.
Following an emergency meeting of the government on Monday — ostensibly to discuss the failure of talks at the weekend — Greek Prime Minister Alexis Tsipras blamed creditors for the deadlock, although this was swiftly rebuffed by Europe.
Michael Fuchs, vice chairman of Germany’s CDU/CSU – the ruling conservative coalition, led by German Chancellor Angela Merkel — told CNBC Tuesday that Greece needed to decide whether to stay in or get out of the euro zone.
“It’s not a question of whether we are ready (for Greece to leave the euro zone), it’s for Greece to decide what they want to do,” he told CNBC Europe’s “Squawk Box.”
“If they are not coming up with any new reform proposals which we have agreed…and now they’re breaking the contracts they have with us. They’re breaking all the rules.”
On Monday, Tsipras sounded a defiant note, saying that his government was not partaking in “ideological stubbornness,” but was defending democracy. Signalling that Greece was in no hurry to concede ground on reform proposals, he added that the country would “wait patiently till the institutions adhere to realism.”
Greek Finance Minister Yanis Varoufakis, meanwhile, stuck the boot in on Tuesday, saying he would not present any new proposals to lenders at a meeting of euro zone finance ministers later this week, according to an interview with German newspaper Bild.
Germany’s Fuchs told CNBC Varoufakis’ stance was incomprehensible.
“We want Greece to come up with proposals and it’s fully not understandable that Varoufakis is saying this morning that he is not coming up with new proposals and yet he wants us to give him proposals,” he said.
“We have made it very clear that first of all we need a primary surplus in Greece, but we want him to do something with the pensions, with the VAT (sales tax) and he has to make sure he’s collecting the taxes.”
Athens Poised On Verge Of Catastrophic Default
The Independent – Ben Chu
The world’s financial markets are facing up to the possibility that Greece could soon become the first country to crash out of Europe’s single currency.
Talks between Athens and its eurozone creditors have collapsed in acrimony just days before a final deadline for Greece to unlock the €7.2bn (£5.2bn) in bailout funds it needs to avoid a catastrophic debt default.
The Greek Prime Minister, Alexis Tsipras, accused the creditor powers of hidden “political motives” in their demands that Greece make further cuts to public pension payments in return for the financial aid.
“We are shouldering the dignity of our people, as well as the hopes of the people of Europe,” Mr Tsipras said in a defiant statement. “We cannot ignore this responsibility. This is not a matter of ideological stubbornness. This is about democracy.”
Günther Oettinger, a European Commissioner and member of the German Chancellor’s ruling Christian Democrat party, hit back –suggesting Greece could soon be designated an “emergency area” if it fails to pay its debts later this month.
Greek government interest rates – which reflect the likelihood that investors attach to a future sovereign default – soared as soon as markets opened on Monday.
There were also ominous signs of financial contagion across the single currency, as the interest rates of Greece’s potentially vulnerable eurozone neighbours such as Italy, Spain and Portugal also shot up.
Stock markets across Europe also fell, with almost 5 per cent wiped off Greek shares by increasingly worried investors.
Tsipras Accuses Creditors of “Pillaging” Greece
The Financial Times – Peter Spiegel and Kerin Hope
Alexis Tsipras, the Greek prime minister, vowed not to give in to demands made by his country’s international creditors, accusing them of “pillaging” Greece for the past five years and insisting it was now up to them to propose another rescue plan to save Athens from bankruptcy.
Mr Tsipras’s remarks came less than 24 hours after the collapse of last-ditch talks aimed at reaching agreement on the release of €7.2bn in desperately needed rescue funds. The comments were part of a chorus of defiance in Athens that left many senior EU officials convinced they can no longer clinch a deal with Greece to prevent it from crashing out of the eurozone.
Without a deal to release the final tranche of Greece’s current bailout, Athens is likely to default on a €1.5bn loan repayment due to be paid to the International Monetary Fund in two weeks, an event officials fear would set off a financial chain reaction from which Greece would be unable to recover.
“One can only suspect political motives behind the fact that [bailout negotiators] insist on further pension cuts, despite five years of pillaging,” Mr Tsipras said in a statement. “We are carrying our people’s dignity as well as the aspirations of all Europeans. We cannot ignore this responsibility. It is not a matter of ideological stubbornness. It has to do with democracy.”
Reflecting the growing fears of a Greek default, Günther Oettinger, Germany’s European commissioner, called for an “emergency plan, a ‘Plan B’” in case Athens failed to reach a deal, saying this would lead to “a state of emergency” in Greece, including difficulties paying for energy, police services and medicines …
But officials representing Greek creditors said many of the underlying fiscal measures — particularly the €2.4bn in savings attributed to “administrative measures” — were unlikely to be met, making the promise to achieve surplus levels meaningless.
“It’s like you saying you promise to lose 20 kilos by next June, but you keep eating the same amount of chocolate,” said one senior official from one of Greece’s bailout monitors.
Hardliners in Mr Tsipras’s ruling Syriza party demanded a definitive break with creditors, calling on supporters to stage street protests against further austerity measures.