Brussels, 30/06/2015 (Agence Europe) - In an extraordinary videoconference of the Eurogroup in the early evening of Tuesday 30 June, eurozone finance ministers did not agree to the Greek request to extend the current programme for a further short period. The Eurogroup will meet again remotely on Wednesday. It is possible that Greece may bring forward fresh proposals.
The European financial stability fund (EFSF) confirmed in a press release that its programme would come to an end on Tuesday evening. “It is regrettable for Greece that the EFSF programme will expire today without any follow-up arrangement and that the positive results of the programme are put at risk”, stated Klaus Regling, director general of the eurozone rescue fund. From 1 July, Athens alone will be responsible for its operating costs and for its refinancing on the markets. Interest rates on Greek debt, in the meantime, remain prohibitively high.
The Eurogroup made no statement on Tuesday evening. Only the Finnish minister, Alexander Stubb, spoke on his Twitter account, of the three demands that Greek Prime Minister Alexis Tsipras had made earlier in the day in a letter, in a dramatic and unexpected change to the Greek position. According to Stubb, extension of the bailout plan and a discount on the Greek debt “are not possible”. Furthermore, a request for assistance from the European stability mechanism (ESM) is always processed according to usual procedures, he stated. In short: it takes time to put together a bailout plan.
“It's too late for an extension of the aid programme”, said Eurogroup President Jeroen Dijsselbloem in a televised interview, adding that Greece would submit a new assistance request on Wednesday. The “institutions” (European Commission, the ECB and the IMF) will study it “only after the referendum”, he added, warning that a third aid package could contain more onerous conditions. Dijsselbloem also indicated that Greece had come up with proposals “closer to the demands of the institutions”. According to our information, Greece would be prepared to accept the latest proposals tables in return for changes with regard to tax and pensions arrangements.
Maltese Prime Minister Joseph Muscat is reported by the Times of Malta to have said in the national parliament that Greece had offered to suspend its referendum if negotiations were resumed. In the Eurogroup, Greece is believed to have promised this, as well as to campaign for a “yes” vote if the referendum went ahead. In Athens on Tuesday evening, 20,000 people gathered to demonstrate in favour of a “yes” in the referendum scheduled for Sunday 5 July (see EUROPE 11345 and 11346).
Athens officially requests a 3rd aid package
In his letter, Alexis Tsipras requested a new financial bailout plan, this time from the European Stability Mechanism, for the amount of €29.1 billion over two years, solely for the purposes of servicing the debt. Greece also called for its debt to the EFSF to be restructured and re-profiled along the lines of the proposals to be made by the Commission to allow the debt to become viable. Lastly, the Greek government asked for the current EFSF plan to be extended for a short period in order to avoid technical default.
Earlier that day, the European Commission confirmed that Jean-Claude Juncker had spoken to Alex Tsipras on the telephone, the latter having called him on Monday evening. Juncker sketched out for him a possible last-minute agreement, according to a Commission spokesperson, Margaritis Schinas. It would be a matter of agreeing to the proposal put forward by the institutions last Friday and of the government campaigning for a 'yes' vote in the referendum; the overall agreement would include a response to the country's financial needs and the question of the viability of the debt.
The Greek Finance Minister, Yanis Varoufakis, confirmed on Tuesday that Greece would not be able to make its repayment. This does not appear to have caused too many worries in the eurozone, where it has been observed that it is possible to be in arrears to the IMF for a number of years. The ratings agencies have already announced that they would not consider non-payment to the IMF as a default. However, the real deadline appears to be 20 July, when Greece is to pay €3.5 billion back to the ECB. (Elodie Lamer)