Brussels, 01/07/2015 (Agence Europe) - The finance ministers of the eurozone have suspended any discussion on a third bailout plan for Greece until the outcome of the referendum to be held on Sunday 5 July is known. “The main decision is that given the situation, the rejection of the previous proposals, the holding of the referendum” and the fact that the government intends to campaign in favour of a 'no' vote to the proposals of the institutions, “we can see no common ground to continue talks at this stage”, the president of the Eurogroup, Jeroen Dijsselbloem, said in a video statement on the evening of Wednesday 1 July.
There will therefore be no further eurozone talks before Monday, following the referendum, or any between Greece and the institutions on agreeing conditions or entering into financial arrangements, Dijsselbloem explained. The Eurogroup has therefore not given the Commission a mandate for the time being to carry out, alongside the ECB, an assessment of the economic and financial situation of Greece - the first formal stage in negotiations for a bailout plan under the European Stability Mechanism. Unless the 'ayes' have it in the referendum, it will be extremely hard to move forward on this front, a eurozone source explained.
The address given earlier by the Greek prime minister, Alexis Tsipras, did little to improve the confidence of the eurozone in the willingness of the Greek government to cooperate, according to the Finnish minister, Alexander Stubb.
Referendum to go ahead.
More determined than ever, the Greek Prime Minister, has announced that the referendum of 5 July on the package of reforms negotiated with the creditors in the framework of the bailout plan which expired at the end of July will go ahead, despite hopes of a possible turnaround in the situation. Calling for the proposals on the table to be rejected, Tsipras still believes that a 'no' vote in the referendum will strengthen Greece's negotiating position in order to get a better agreement on a third bailout plan.
In the media, there has also been a certain amount of criticism of the fact that the documents containing the proposals of the 'institutions' seem to have been translated so as to push for a no-vote in the referendum.
European exasperation. At European level, flexibility and patience seem to be wearing thin. “Europe wants to help Greece. But cannot help anyone against their own will. Let's wait for the results of the Greek referendum”, the President of the European Council, Donald Tusk, said on his Twitter account. Addressing the Bundestag on Wednesday, the German Chancellor, Angela Merkel, also spoke of the need to wait for the results of the referendum to decide whether negotiations can be resumed. “The agreement is right now. Waiting until after the referendum could be a leap into the unknown”, was, however, the view of the French President, François Hollande.
Will the Greek government be able to hold on if the Greek people contradict Tsipras' position in the referendum? At this stage, it is not clear whether it will. What is certain is that the Eurogroup will struggle to trust a government in the position of having to implement a package of reforms which it actively campaigned against.
Greece's last requests. In a letter dated Tuesday 30 June, the Greek Prime Minister officially requested a bailout plan over two years from the European Stability Mechanism (ESM), putting Greece's financial needs at €29.1 billion. As regards the content of the reforms to be implemented in return for the financial support, he made a number of requests: - keeping in place a reduced rate of VAT for the Greek islands; - the application of the pension reform in October rather than July and the reform of the employment market in the autumn.
On Tuesday, Greece failed to pay back €1.6 billion to the IMF, making it the first-ever European country under a bailout plan to have found itself in this position. The European Financial Stability Fund (EFSF) on Wednesday officially took note of this 'non-payment' and observed that the Director General of the IMF had informed the Washington-based institution's board of directors. The IMF is to examine Greece's request to postpone this repayment until November.
In this situation, there are three options open to the EFSF: immediately call in its loans, reserve its rights or waive its rights. “The Commission's decision is to recommend that the member states do not take any immediate action”, but wait until a decision is taken regarding the next programme, said the Vice-President of the Commission, Valdis Dombrovskis.
The European Commissioner went on to explain that an agreement on a new financial assistance package was possible before Greece is due to pay back its next tranche. On 20 July, Greece is to pay €3.5 billion back to the ECB, or have to wave goodbye for good to emergency cash for the Greek banking sector. (Mathieu Bion)