Greece debt talks: Crisis deepens amid deadlock
Eurozone finance ministers are meeting in a desperate bid to find a solution to the Greece debt crisis amid deadlock between Athens and its creditors.
Earlier talks between Greece’s Prime Minister, Alexis Tsipras, and the country’s international lenders ended without agreement.
Ahead of the Eurogroup meeting, the German finance minister warned that the gap between the two sides was widening.
Greece must repay a €1.6bn (£1.1bn) IMF loan by next Tuesday or face default.
That could lead to Greece exiting the eurozone, with possible repercussions for the rest of Europe and the world economy.
Only once agreement is reached will the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) unlock the final €7.2bn tranche of bailout funds for cash-strapped Greece.
The crisis threatens to overshadow a summit of EU leaders opening on Thursday afternoon.
Throughout the Greek crisis, the IMF has been concerned that the programme should add up. That means that specific actions should be able to achieve whatever targets are agreed for the Greek government’s borrowing needs.
In the current impasse, one concern is that the Greek proposals include too much emphasis on tax rather than spending.
The IMF worry is that might aggravate the economy’s weakness. For the long term the IMF’s concern is that Greece should ultimately have a sustainable debt burden and has been telling the eurozone that it should be thinking about debt relief.
Like the other players in this crisis, the IMF has politics to contend with: IMF member countries (Brazil has been a notable example) who have in the past been unhappy about the organisation’s financial support for Greece.
Sticking to proposals
The Greek government has criticised the international creditors for rejecting its ideas, which were initially welcomed.
Eurogroup head Jeroen Dijsselbloem said finance ministers, who had been due to finalise a deal, would be using the creditors’ plans as a basis for an agreement.
“The only thing we have presented to the Eurogroup is what the institutions have made together,” he said.
“We don’t have agreement from the Greeks on that so we will have to hear in the Eurogroup meeting from the Greek side what their ideas are, what they could agree to, what they could not agree to and we’ll take it from there.”
Greece’s Finance Minister Yanis Varoufakis will attend the meeting and put forward Athens’ own proposal.
Meanwhile German Finance Minister Wolfgang Schaeuble said: “The decisions lie exclusively with the Greek authorities.
“They have, however, rather gone backwards.”
an agreement is reached, it will have to be endorsed by Greece’s parliament, with some critics at home accusing the prime minister of reneging on his party’s campaign pledge to end austerity.
The Greek debt crisis is set to dominate the summit of European leaders which starts in Brussels on Thursday.
The main focus of the summit on Thursday is set to be the migration crisis, which has seen thousands of illegal migrants arriving in southern Europe, and security concerns in the wake of the conflict in Ukraine.
UK Prime Minister David Cameron will also outline his plans for reform of the EU ahead of an in/out referendum to be held in Britain before the end of 2017.
source:BBC
