Despite an all-night discussions at the summit of Heads of State and Government of the euro area in Brussels, oppositions persist Monday, July 13 morning between negotiators from the eurozone and those of Greece on the modalities a new rescue plan for the country, do we learned from sources close to the discussions. An official with the Greek government in particular reported that there were still divisions on the role of the International Monetary Fund (IMF) and the terms of privatization.
Greece is particularly opposed to the idea of an independent and external funds based in Luxembourg to which countries would be transferred 50 billion euros of Greek assets to be privatized. Revenue from privatization would be used directly to repay Greek debt, bypassing Athens. This proposal is among the reforms catalog drafted Sunday by the finance ministers of the euro area for the Heads of State and Government at their summit studying.
“Last-ditch consultations “
This new twist to a few hours of the opening of European financial markets comes a spokesman for the President of the European Council Donald Tusk announced less than an hour before that a compromise proposal on the table. A plenary meeting of Heads of State and Government of the euro has been suspended in the night to allow Donald Tusk, French President Francois Hollande, German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras forward in the discussions.
While some delegations expected to attend the press concluding an agreement at about 5 am French time, the dynamic has suddenly stopped. “It is late, apparently there are still some points to be set” , is it also commented in a national delegation, while another European source indicated that the Germany was not completely satisfied with the negotiations. Shortly before 6am the Maltese Prime Minister Joseph Muscat on Twitter announced a new interrupt for “ultimate consultations.”
Suspicion
The marathon negotiations over the weekend has begun by the finance ministers of the euro area Saturday morning in an extremely tense atmosphere. Interrupted around midnight, the eurogroup meeting resumed Sunday morning and ended with the drafting of a draft statement sent to heads of state and government arrived Sunday afternoon in Brussels.
The European partners of Greece demanded in this document pledges from Athens before formally starting the process of a third bailout needed to avoid a “Grexit”. Exasperated by the government turnovers Alexis Tsipras during months of negotiations, the “hawks” of monetary union will have obtained that the Greek Parliament passes including July 15, a reform of VAT and pensions before to initiate the formal process of the third plan.
The European leaders fear that after obtaining funds, the Greek government does not interrupt the implementation of privatization and reforms promised to its creditors, such as pension or taxation.
Last Chance
They also hardened consistently the reform plan approved Saturday by the Greek Parliament and was already back many requirements Creditors, however, requests rejected by Greek citizens in a referendum Sunday, July 5. These proposals were considered insufficient by countries such as Germany and Finland, although France and the experts of “institutions” – European Commission, European Central Bank and International Monetary Fund. – Gave their favorable opinion first Friday
The question of rescheduling of part of the Greek debt, which represents 175% of GDP, but also asked the Eurogroup document is content at this point to emphasize that there can have outright discount (“haircut”). The layout of the Greek debt arouses strong resistance in countries like Germany, but is the main argument of Alexis Tsipras to be accepted by his countrymen the new austerity measures.
While Greek banks are closed and completely dependent on emergency liquidity provided by the ECB, the proposed agreement to Tsipras is considered his last chance to avoid the financial and economic collapse of the country.
( With Reuters)
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