The ECB has said the bloc may need up to €1.5 trillion to tackle the crisis.
However, France’s Finance Minister Bruno Le Maire hailed the agreement as the most important economic plan in EU history.
He tweeted after the talks: “Europe has decided and is ready to meet the gravity of the crisis.”
The main component of the rescue plan involves the European Stability Mechanism, the EU’s bailout fund, which will make €240 billion available to guarantee spending by indebted countries under pressure.
The EU ministers also agreed other measures including €200 billion in guarantees from the European Investment Bank and a European Commission project for national short-time working schemes.
Ministers were close to a deal on April 8, but the talks broke down and had to be resumed a day later, amid a dispute between Italy and the Netherlands over how to apply the recovery fund.
The coronavirus pandemic has exposed deep divisions in Europe, where Italy and Spain have accused northern nations like Germany and the Netherlands of not doing enough.
Emerging markets and developing countries would be the hardest hit, the IMF chief said, requiring hundreds of billions of dollars in foreign aid.
She said: “Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020.
“Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.”
Kristalina Georgieva added: “In fact, we anticipate the worst economic fallout since the Great Depression.”
She said that if the pandemic eased in the second half of 2020, the IMF expected to see a partial recovery next year. But she cautioned that the situation could also worsen.
Kristalina Georgieva’s comments came as the US reported that the number of Americans seeking unemployment benefits had surged for the third week by 6.6 million, bringing the total over that period to more than 16 million Americans.
On April 9, following marathon talks, EU leaders agreed a €500 billion ($546 billion) economic support package for members of the bloc hit hardest by the lockdown measures.
The European Commission earlier said it aimed to co-ordinate a possible “roadmap” to move away from the restrictive measures.
Earlier this week, the International Labor Organization (ILO), a UN agency, warned that the pandemic posed “the most severe crisis” since World War Two.
The ILO said the outbreak was expected to wipe out 6.7% of working hours across the world during the second quarter of 2020 – the equivalent of 195 million full-time workers losing their jobs.
Last month, the Organization for Economic Co-operation and Development (OECD) warned that the global economy would take years to recover.
OECD secretary general Angel Gurría said that economies were suffering a bigger shock than after the 9/11 terror attacks of 2001 or the 2008 financial crisis.
The International Monetary Fund head
said such companies “will use their enormous customer bases and deep
pockets to offer financial products based on big data and artificial
“This presents a unique systemic
challenge to financial stability and efficiency,” she added.
Christine Lagarde cited China as a most recent example.
She said: “Over the last five
years, technology growth in China has been extremely successful and allowed
millions of new entrants to benefit from access to financial products and the
creation of high-quality jobs.
“But it has also led to two firms controlling more than 90% of the mobile payments market.”
Eurozone ministers have agreed to unlock the latest tranche of Greece’s bailout cash.
The bailout fund will disburse 8.5 billion euros to Greece, they said in a statement.
The latest tranche of the international bailout will help avert a fresh debt crisis in July when the next €7 billion euro repayment of loans becomes due.
The payment is still subject to parliamentary approvals in some countries.
IMF Director Christine Lagarde said she would propose an approval in principle to her executive board.
The International Monetary Fund wants clarity on longer-term debt relief for Greece once the current funding scheme, worth up to 86 billion euros, runs out next year.
Christine Lagarde said the IMF was ready to participate to the third bailout program for Greece after the meeting of eurozone finance ministers in Luxembourg which capped months of negotiations.
However, the IMF could join the program with a financial support “in the range of $2 billion” only after a full deal on additional measures of debt relief for Greece, she said.
Time was beginning to press for this payment. Greece has repayments on other loans due next month, which it could not otherwise have made.
The decision reflects economic policy actions already taken by Greece and the new commitment by the IMF’s managing director Christine Lagarde to recommend that her board contribute financially to this bailout.
An IMF contribution was politically important for Germany, especially to strengthen the perceived credibility of the bailout.
The institutions in charge of Greece’s bailout have reached a “common position” on how to proceed, German finance minister Wolfgang Schaeuble has announced.
Wolfgang Schaeuble’s comments appear to indicate that deadlock between the EU and the IMF over the next steps may have been resolved.
The IMF has said Greece needs more leeway to pay its huge debts before further rescue funds can be released.
However, the eurozone has been reluctant to go much further.
Arriving for a meeting of eurozone finance ministers in Brussels, Wolfgang Schaeuble said: “I believe the institutions have a common position and that we will get to a point today where the technical mission can go to Athens so we can get a result.”
In its most recent assessment of the Greek economy, the IMF said: “Greece cannot grow out of its debt problem. Greece requires substantial debt relief from its European partners to restore debt sustainability.”
Eurozone governments have provided some debt relief already, in the form of lower interest rates and extended repayment periods. IMF staff thinks Greece needs more concessions.
However, the IMF has said there was no need for what it calls an “upfront haircut” – a reduction in the principal that has ultimately to be repaid.
In another development, Klaus Regling, the CEO of the European Stability Mechanism – the eurozone’s bailout fund – said in a newspaper interview that Greece’s finances were improving faster than expected.
He told Germany’s Bild that Greece would probably need far less than the agreed maximum loan of 86 billion euros by August 2018 as a result.
Athens has made a 2 billion euro repayment to the bailout fund as expected, which Klaus Regling said showed “Greece is a reliable contract partner. It is a sign that the restructuring of the Greek banking sector is progressing well”.
Ex-IMF chief Rodrigo Rato and 64 other bankers have gone on trial in Madrid over an alleged credit card racket at Spain’s troubled Bankia bank.
The defendants allegedly used “unofficial” company credit cards for luxury purchases, unconnected with their duties as board members.
Prosecutors say about €12 million ($13.5 million) was spent on hotels, fine clothes, entertainment and travel.
Rodrigo Rato denies wrongdoing. Bankia was rescued in 2012 at huge public expense.
Image source Wikipedia
The unofficial credit card purchases were not declared to the tax authorities. The system allegedly started at Caja Madrid bank and was continued by Rodrigo Rato when Bankia was created in 2011.
A member of the governing center-right Popular Party (PP), Rodrigo Rato resigned as head of Bankia shortly before its near-collapse in 2012.
The government bailout of Bankia inflicted losses on 200,000 small investors, who held preferential shares in the bank.
Some of them voiced their anger outside the Madrid courthouse on September 26.
“You wretches! Stealing money from pensioners!” they shouted at the accused as the trial got under way.
Prosecutors are seeking four-and-a-half years in jail for Rodrigo Rato and six years for Miguel Blesa, the former president of Caja Madrid, a bank that was merged with six others in 2011 to create Bankia.
If found guilty, Rodrigo Rato could also face a €2.7 million fine, while Miguel Blesa could face a fine of €9.3 million.
Rodrigo Rato headed the IMF from 2004 to 2007. He also served as Spanish economy minister, and his fall from grace helped fuel accusations that the Popular Party was riddled with corruption.
Prosecutors say the lavish credit card purchases took place from 2003 to 2012 – some of them during Spain’s financial crisis, when millions of citizens suffered hardship and unemployment soared.
Rodrigo Rato’s two successors at the top of the IMF have also been caught up in high-profile court cases.
French Socialist Dominique Strauss-Khan took over from Rodrigo Rato in 2007 but resigned in May 2011 to defend himself against charges of attempted rape in New York. Prosecutors dropped the charges later that year, then DSK reached an out-of-court settlement with the hotel maid who accused him.
DSK’s successor at the IMF, Christine Lagarde, is to go on trial in France in December over a state award of €285 million in damages to tycoon Bernard Tapie when she was finance minister.
Christine Lagarde is accused of “negligence”, but denies any misconduct.
The International Monetary Fund has dismissed reports that it is trying to push Greece towards default as “simply nonsense”.
“The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks,” IMF chief Christine Lagarde wrote in a letter to Greek PM Alexis Tsipras.
Christine Lagarde’s letter comes after Wikileaks published a transcript of IMF officials discussing bailout negotiations.
One says a “crisis” could force a deal.
Greece publicly demanded an explanation after the leak, suggesting the comments meant the IMF could be planning to deliberately prolong debt negotiations until the country was close to running out of money.
Christine Lagarde said the “incident” had made her “concerned as to whether we can indeed achieve progress”, but said she had decided to allow the IMF team to return to Athens to continue debt discussions.
However, the IMF chief also warned that the latest bailout deal was “still a good distance away”.
Christine Lagarde said that the IMF could only support a deal that would enable “robust growth” for Greece, while also allowing it to tackle its debt repayments.
In 2015, Greece agreed a multi-billion dollar bailout with the EU and IMF that was needed for the country to avoid bankruptcy and stay in the eurozone.
Talks between Greece, the EU and the IMF on a bailout review, assessing Greece’s progress at implementing money-saving reforms and aimed at unlocking further loans, are due to resume this week.
The review has been suspended twice since January due to disagreement among the lenders over the estimated size of Greece’s fiscal gap by 2018, as well as different opinions on pension reforms and how bad loans are being managed.
“In the interest of the Greek people, we need to bring these negotiations to a speedy conclusion,” wrote Christine Lagarde.
Greece has challenged the International Monetary Fund (IMF) over a leaked conversation in which top officials allegedly discuss the Greek bailout.
Wikileaks published a transcript showing top officials discussing ways of putting pressure on Greece, Germany and the EU to get them to wrap up talks.
One of those quoted suggests a crisis “event” may be needed to force a conclusion.
Further negotiations between Greece and its lenders are due next week.
In 2015, Greece agreed a multi-billion dollar bailout with the EU and IMF that was needed for the country to avoid bankruptcy and stay in the eurozone.
The Wikileaks conversation purportedly involves Poul Thomsen, head of the IMF’s Europe department, and Delia Velculescu, leader of the IMF team in Greece, the senior officials in charge of Greece’s debt crisis.
Poul Thomsen is quoted as complaining about the pace of talks on reforms Greece has agreed to carry out in exchange for the bailout.
“What is going to bring it all to a decision point?” he asks.
“In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default.”
Delia Velculescu later agrees: “We need an event, but I don’t know what that will be.”
Poul Thomsen also appears to suggest the IMF could pull out of the bailout to force German Chancellor Angela Merkel to agree to debt relief.
Such a move could be politically difficult for Angela Merkel, the key figure in the crisis.
“Look…, Mrs. Merkel, you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say <<the IMF is not on board?>> or to pick the debt relief that we think that Greece needs in order to keep us on board? Right?” Poul Thomsen says.
The IMF would not comment on the purported leaks but said its public position on the matter was clear.
Former Greek finance minister Yanis Varoufakis said: “As WikiLeaks revealed today, the IMF is planning to stall until July to bring Greece to its knees [again!] in order to force Angela Merkel’s hand.
“It’s time to stop Greece’s fiscal water boarding by an incompetent, misanthropic troika.”
IMF head Christine Lagarde is facing trial French trial for alleged negligence over a €404 million ($438 million) payment to businessman Bernard Tapie in 2008.
Christine Lagarde, 59, was finance minister in President Nicolas Sarkozy’s government at the time of the compensation award to Bernard Tapie for the sale of a company.
Bernard Tapie supported Nicolas Sarkozy in the 2007 presidential election.
Christine Lagarde’s lawyer described the court’s decision as “incomprehensible”, and said the IMF chief would appeal.
In a statement Christine Lagarde said she had “always acted in this affair in the interest of the state and in respect of the law”, AP reported.
Photo Getty Images
Bernard Tapie was once a majority shareholder in sports goods company Adidas but sold it in 1993 in order to become a cabinet minister in Francois Mitterrand’s Socialist government.
He sued the Credit Lyonnais bank over its handling of the sale, alleging that the partly state-owned bank had defrauded him by deliberately undervaluing the company.
Bernard Lagarde’s case was later referred by Christine Lagarde to a three-member arbitration panel which awarded the compensation, causing a public outcry.
Investigators suspect he was granted a deal in return for his support of Nicolas Sarkozy.
Earlier this month, a French court ruled that Bernard Tapie was not entitled to any compensation for that sale and should pay back the €404 million with interest.
France’s Court of Justice of the Republic (CJR) decided that Christine Lagarde should be tried on the charge of “negligence by a person in position of public authority” over the compensation case, iTele TV channel and the Mediapart website reported on December 17.
A court spokesman later confirmed the decision.
If convicted, Christine Lagarde could be sentenced to one year in prison.
French media said the CJR investigation magistrates declined to follow the recommendation of another court which last year decided not to pursue the case.
“I will recommend Mrs. Lagarde appeal against this decision.”
A spokesman for France’s attorney general said Christine Lagarde would have five days to appeal, once the court decision is made public on December 18 or December 21.
Meanwhile, IMF spokesman Gerry Rice said the organization – which represents 188 member nations – “continues to express its confidence in the managing director’s ability to effectively carry out her duties”.
Christine Lagarde replaced Dominique Strauss-Kahn as IMF managing director in 2011.
Dominique Strauss-Kahn – also a former French minister – resigned following his arrest in New York on charges of assault that were later dropped.
China’s currency, the yuan, will join the IMF’s group of international basket of reserve currencies, the Fund is expected to announce on November 30.
Just the US dollar, the euro, Japan’s yen and the British pound are currently part of this select band.
Earlier this month, IMF Managing Director Christine Lagarde backed the yuan’s inclusion.
If the decision is made, the yuan is likely to join in 2016, experts said.
China is the world’s second largest economy behind the US and asked for the yuan to become a reserve currency in 2014.
Reserve currencies are used by central banks and other financial organizations to help pay down international debt and steady exchange rates.
The last change made to the basket was in 2000, when the euro replaced the German mark and the franc.
If Beijing’s wish is granted on November 30, some analysts have suggest that by 2030 the yuan will become one of the top three major international currencies, together with the dollar and the euro.
Concerns about Beijing keeping the yuan artificially low to help exporters is one reason the currency has previously failed to meet the criteria for reserve currencies set out by the International Monetary Fund.
However, Chinese officials have a made a concerted effort to build support for the yuan’s inclusion, and a recent IMF staff report endorsed such a move.
Initially, the yuan’s inclusion would be largely a symbolic gesture, some analysts have said.
They have also said the yuan’s ongoing inclusion in the basket would depend on whether China continues its financial reforms.
The International Monetary Fund (IMF) has attacked the EU over the terms of a bailout offered to Greece.
The IMF said Greece’s public debt was now “highly unsustainable” and urged debt relief on a scale “well beyond what has been under consideration to date”.
On July 14, the IMF made public advice it had given to the Eurogroup of finance ministers at the weekend.
That advice included proposals that would see some of Greece’s enormous debt written off.
The IMF study said EU countries would have to give Greece 30-years to repay all its European debt, including new loans, and a dramatic extension on the maturity of its debts. Without such extensions creditors might have to accept “deep upfront haircuts” on existing loans, the IMF added.
The split between the IMF and Greece’s European creditors over how best to deal with the country’s debt crisis has been hinted at before, but this is the first time such a disagreement has been made public.
One senior IMF official said the fund would only participate in a third bailout for Greece if EU creditors produce “a clear plan”.
The current deal “is by no means a comprehensive, detailed agreement”, the official said.
Under the new bailout terms, eurozone governments will contribute between €40 billion and €50 billion to Greece’s new three-year bailout, the IMF is expected to contribute another major chunk and the rest will come from selling off state assets and the financial markets.
The split between the IMF and the EU comes just hours before the Greek parliament is due to vote on a raft of economic reforms demanded of the Eurogroup over the weekend as a condition of a third Greek bailout.
The measures – which face resistance from PM Alexis Tsipras’ own lawmakers – include taxation increases and pension curbs.
Greece owes about 10% of its debt to the IMF.
It has missed two deadlines for repayment to the fund and is the first EU country ever to do so.
The IMF also said it regarded forecast rates of growth for Greece as unrealistically high.
Its analysis, released on July 14, pointed to Greek government debt reaching a peak of close to 200% of GDP or national income – over the next two years, which it called “highly unsustainable”.
On July 14, Alexis Tsipras said in an interview on state television that he did not believe in the bailout offered but was willing to implement it to “avoid disaster for the country” and the collapse of the banks.
The conditional agreement to receive up to €86 billion ($95 billion) from the EU over three years depends on further economic reforms – including the labor markets, banks and privatization – being passed after July 15.
Hard-liners in Alexis Tsipras’ own Syriza party are likely to rebel and the junior coalition party, the Independent Greeks, have offered only limited support for the reforms
Meanwhile, unions and trade associations representing those including civil servants, municipal workers and pharmacy owners have called or extended strikes to coincide with Wednesday’s parliamentary votes.
Greece also faces an immediate cash crisis. Banks have been shut since June 29.
Alexis Tsipras warned banks are unlikely to reopen until the bailout deal is ratified, and this could take another month.
A suggestion of providing Greece with emergency funding under the EU-wide European Financial Stability Mechanism has been opposed by Britain, which is not part of the euro but is an EU member.
Greece has failed to repay €1.6 billion loan to the International Monetary Fund (IMF), hours after eurozone ministers refused to extend its bailout.
However, eurozone ministers say they will discuss a last-minute request from Greece for a new two-year bailout on July 1.
Greece is the first advanced country to fail to repay a loan to the IMF and is now formally in arrears.
There are fears that this could put Greece at risk of leaving the euro.
The IMF confirmed that Greece had failed to make the payment, shortly after 22:00 GMT on June 30.
“We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared,” said IMF spokesman Gerry Rice.
Gerry Rice confirmed the IMF had received a request from Greece to extend the payment deadline, which he said would go to the board “in due course”.
With the eurozone bailout expired, Greece no longer has access to billions of euros in funds and could not meet its IMF repayment.
The European Central Bank (ECB) has also frozen its liquidity lifeline to Greek banks. Meanwhile, ratings agencies have further downgraded the country’s debt.
Eurogroup chairman and Dutch Finance Minister Jeroen Dijsselbloem earlier said it would be “crazy” to extend the Greek bailout beyond its June 30 deadline as Athens was refusing to accept the European proposals on the table.
Greece’s left-wing Syriza government, elected on an anti-austerity platform, has been in deadlock with its creditors for months over the terms of a third bailout.
Speaking after the conference call with other eurozone ministers, Jeroen Dijsselbloem said that a Greek request for a new €29.1 billion European aid program would be considered in a telephone conference on July 1.
According to new reports, Greece may submit new proposals on July 1 that rein in its spending
Greece’s request on June 30 asked for funds from Europe’s bailout fund – the European Stability Mechanism – as well as a restructuring of Greece’s public debt.
German Chancellor Angela Merkel earlier said she had ruled out further negotiations until after July 5 referendum, which will ask Greeks if they want to accept the deal offered by their creditors.
The Greek government took the unilateral decision to hold a vote last weekend, angering eurozone ministers.
Greece has requested a new bailout deal from the eurozone, just hours before it must repay €1.6 billion to the International Monetary Fund (IMF).
The Greek government is asking for a new two-year €29.1 billion aid deal from a bailout mechanism for eurozone countries.
Eurozone finance ministers discussed the Greek offer in a teleconference on Tuesday evening, but made no decision.
If it fails to make the IMF payment, Greece could risk leaving the euro.
The European Commission, which is one of Greece’s creditors, wants Athens to raise taxes and cut welfare spending.
No advanced economy has ever missed a payment on an IMF loan.
Amid fears of a Greek default on its huge public debt of €323 billion – and a possible exit from the euro – long queues of people are continuing to snake from many cash machines in Greece, where withdrawals are capped at just €60 a day.
On Tuesday evening, thousands of pro-EU protesters braved stormy weather and gathered outside the Greek parliament in Athens to urge a “Yes” vote in a referendum on July 5 over whether the country should accept its creditors’ proposals.
It follows a similar demonstration by those advocating a “No” vote – the path preferred by PM Alexis Tsipras – on June 29.
Greek banks did not open this week after talks between Greece and its creditors broke down.
However, up to 1,000 bank branches will re-open from July 1 to allow pensioners – many of whom do not use bank cards – to withdraw up to €120.
The European Commission offered a slightly amended deal to Greece late on Monday night, which the Greek government did not accept.
Instead, Greece responded with a request for a two-year deal under the European Stability Mechanism (ESM), the bailout mechanism for eurozone countries whose aim is to maintain the stability of the euro. The ESM did not exist when Greece was bailed out in 2010 and 2012.
However, German Chancellor Angela Merkel has insisted that the eurozone’s wealthiest member will not enter into new aid negotiations with Greece before its weekend referendum.
“Before a referendum, as planned, is carried out, we won’t negotiate on anything new at all,” Angela Merkel said.
The ECB is believed to have disbursed virtually all of its emergency funds for Greece, amounting to €89 billion.
Greece’s PM Alexis Tsipras has announced that the Greek banks are to remain closed and capital controls will be imposed.
Speaking after the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks, Alexis Tsipras said Greek deposits were safe.
Greece is due to make a €1.6 billion payment to the International Monetary Fund (IMF) on June 30 – the same day that its current bailout expires.
The country risks default and moving closer to a possible exit from the eurozone.
Greeks have been queuing to withdraw money from cash machines over the weekend, and the Bank of Greece said it was making “huge efforts” to keep the machines stocked.
Greek banks are expected to stay shut until July 7, two days after Greece’s planned referendum on the terms it had been offered by international creditors for receiving fresh bailout money.
The Athens stock exchange will also be closed on June 29.
Eurozone finance ministers blamed Greece for breaking off the talks, and the European Commission took the unusual step on Sunday of publishing proposals by European creditors that it said were on the table at the time.
Greece described creditors’ terms as “not viable”, and asked for an extension of its current deal until after the vote was completed.
“[Rejection] of the Greek government’s request for a short extension of the program was an unprecedented act by European standards, questioning the right of a sovereign people to decide,” Alexis Tsipras on June 28 said in a televised address.
“This decision led the ECB today to limit the liquidity available to Greek banks and forced the Greek central bank to suggest a bank holiday and restrictions on bank withdrawals.”
Alexis Tsipras said he had sent a new request for an extension to the bailout.
“I am awaiting their immediate response to a fundamental request of democracy,” he said.
Following the news from Greece the euro fell by nearly two US cents against the dollar in early Asia Pacific trade, Reuters reported.
The announcement comes after a particularly turbulent few days for Greece.
The current ceiling for the ECB’s emergency funding – Emergency Liquidity Assistance (ELA) – is €89 billion. It is thought that virtually all that money has been disbursed.
Greek PM Alexis Tsipras has announced a referendum on a controversial bailout deal with foreign creditors for July 5.
In a TV address, Alexis Tsipras described the plan as “humiliation” and condemned “unbearable” austerity measures demanded by creditors.
The Greek government earlier rejected the proposals, aimed at avoiding Greece defaulting on its debt.
Greece has to make a €1.5 billion ($1.7 billion) IMF debt repayment on June 30.
Alexis Tsipras said: “These proposals, which clearly violate the European rules and the basic rights to work, equality and dignity show that the purpose of some of the partners and institutions was not a viable agreement for all parties, but possibly the humiliation of an entire people.”
“The people must decide free of any blackmail,” he added.
Greece has refused to accept cuts to pension payments or public sector wages while the IMF is pushing for deeper spending cuts, not just more tax rises.
A key point of friction is a special benefit paid to some low-income pensioners, which creditors want scrapped.
Creditors also want a wider VAT base; Greece says it will not allow extra VAT on medicines or electricity bills, and has also resisted calls for VAT hikes on hotels and restaurants.
Athens wants a concrete commitment to debt relief, something its creditors are not offering.
Greece PM Alexis Tsipras has criticized the country’s international creditors for failing to accept his government’s latest reform proposals.
Alexis Tsipras said this never occurred with similar measures put forward by other states negotiating bailouts, suggesting creditors might not want a deal.
There are also reports that Greece has rejected an IMF counter-proposal seeking more pension and spending cuts.
Alexis Tsipras’ remarks came before he began new talks to secure a debt deal.
Greece must repay €1.6 billion to the International Monetary Fund (IMF) by the end of the month, or face default and possible exit from the EU.
Eurozone finance ministers are due to finalize a deal on June 24 by the end of the day.
On June 24, the ECB again increased additional emergency funding for Greek banks to stave off fears of a bank run – the fifth time in eight days it has done so as fearful savers withdraw up to €1bn a day from domestic banks.
Only once agreement is reached will creditors unlock the final €7.2 billion tranche of bailout funds.
The agreement being formed is believed to include:
New taxes on businesses and the wealthy
Selective increases in VAT
Savings in pensions linked to curbing early retirement and increasing pension contributions
No further reductions in pensions or public-sector wages – “red lines” for Greece’s Syriza government
PM Alexis Tsipras has been meeting the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – the trio evaluating his proposals.
They are hoping to finalize a deal that would release further loans to Greece before it runs out of money.
Reuters news agency quoted a eurozone official as saying that, despite several hours of talks, there had been no breakthrough so far and the sides were “still stuck at the same red lines”.
European leaders hold an emergency summit in Brussels that could break the deadlock around Greece’s debt crisis.
Greece’s Prime Minister Alexis Tsipras said he hoped Greece would “return to growth within the eurozone”.
European finance ministers have said there is still no basis for making a decision for aid for Greece on June 22.
On June 21, Alexis Tsipras set out new proposals to try to prevent a default on a €1.6 billion IMF loan.
But he has ruled out pension cuts, higher power rates, and an excessive budget surplus.
Greece must repay the loan by the end of June or risk crashing out of the eurozone and possibly the EU.
Talks have been in deadlock for five months. The European Commission, the IMF and the European Central Bank (ECB) are unwilling to unlock the final €7.2 billion tranche of bailout funds until Greece agrees to economic reforms.
Greece has announced it will delay June 5 €300 million ($330 million) debt repayment to the International Monetary Fund.
The country told the IMF it will bundle all four of its June payments together.
The Greek government will have until June 30 to pay the €1.5 billion total, which is also the day on which its bailout deal with the EU and IMF runs out.
PM Alexis Tsipras is trying to reach a deal to unlock final bailout funds before Greece runs out of money.
But Greece’s creditors say differences remain between the two sides.
IMF spokesman Gerry Rice said that under a precedent dating back to the late 1970s, governments could ask to bundle together “multiple principal payments falling due in a calendar month… to address the administrative difficulty of making multiple payments in a short period.”
The last country to bundle together payments to the IMF was Zambia in the mid-1980s.
Alexis Tsipras said after talks in Brussels on June 4 that an agreement with Greece’s international creditors was “in sight”.
However, the head of the eurozone’s finance ministers Jeroen Dijsselbloem, who was involved in the negotiations, said later the gap was “still quite large”.
High-level talks were expected to resume on June 5, although Alexis Tsipras was due to brief the Greek parliament rather than return to Brussels.
Alexis Tsipras rejected elements of proposals put forward by his country’s international creditors in talks with Jeroen Dijsselbloem and European Commission chief Jean-Claude Juncker.
He said the sides were now “very close to an agreement” on the key sticking point of primary surpluses – the amount by which tax revenues exceed public spending.
Alexis Tsipras also said there were “points that no-one would consider as a base for discussion”, citing cuts to pensions and a raise in sales tax for electricity.
Jeroen Dijsselbloem said the talks had been successful in narrowing down the remaining issues, although key differences still remained.
He expected Greece to “look at our proposals more carefully, probably come up with some alternative proposals that they want,” Reuters quoted him as saying.
Greece’s cash-strapped government has been haggling since February over the release of the last €7.2 billion in funds, but its current bailout arrangement with the IMF, European Central Bank (ECB) and European Commission runs out at the end of June.
Failure to reach a deal could trigger a Greek default and a potential exit from the eurozone.
Greece has “a realistic” debt deal proposal, PM Alexis Tsipras has said.
“We have submitted a realistic plan for Greece to exit the crisis,” he said.
Alexis Tspiras said the plan included “concessions that will be difficult”.
The prime minister’s statement follows talks in Berlin attended by the heads of both the International Monetary Fund (IMF) and the European Central Bank (ECB).
IMF chief Christine Lagarde and ECB president Mario Draghi presence at the meeting between German Chancellor Angela Merkel and France’s Francois Hollande underlines the seriousness of the talks.
Reports suggest the meeting was aimed at coming up with a “final proposal” to issue to Athens.
Howevr, Alexis Tspiras, who was not included in the meeting, said he had not yet been contacted by the IMF and European officials.
“We are not waiting for them to submit a proposal, Greece is submitting a plan – it is now clear that the decision on whether they want to adjust to realism… the decision rests with the political leadership of Europe,” he added.
A €300 million ($330 million) payment from Greece to the IMF is due on June 5.
There are fears Greece does not have the necessary funds to pay and could default on the debt, ultimately leading to its exit from the eurozone.
Friday’s payment is the first of four totaling €1.5 billion that Greece is due to pay to the IMF in June, and it is understood that the payments could be all bundled together and repaid in a single transaction at the end of the month.
If Greece decides to repay the funds in this way, it would have to notify the IMF, but it has not yet done so.
Greece remains in a four-month long deadlock with international creditors over the release of €7.2 billion in remaining bailout funds.
European lenders as well as the IMF are pushing for greater austerity reforms in return for the cash, which the Greek government has so far refused to make.
Syriza parliamentary spokesman Nikos Filis reiterated that the government would not sign an agreement that was incompatible with its anti-austerity program.
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