Hours after Greece’s parliament passed tough reforms required for a third bailout deal, the eurozone ministers have met to discuss on emergency funding to keep Greek banks afloat.
The Eurogroup was also due to discuss next steps in negotiating the bailout.
The Greek government is expected to survive, despite losing its majority after 38 lawmakers voted against the reforms.
Later, the European Central Bank is to consider easing a funding squeeze on Greek banks, allowing them to reopen.
Greece is facing an immediate cash crisis, with banks there closed for more than two weeks.
The European Commission has proposed giving Greece a €7 billion “bridging” loan from an EU-wide fund to help the government pay its mounting debts.
Eurozone ministers have agreed in principle to extend the loan to Greece, according to an unnamed official speaking to Bloomberg. The loan will be announced on July 17 after national parliaments have voted on the bailout deal, the official added.
Eurozone leaders agreed on the bailout in principle in Brussels on July 13, on the condition that the Greek parliament passed reforms on taxation increases and pension curbs by July 15.
PM Alexis Tsipras won the parliamentary vote by 229 votes to 64, but needed the support of opposition lawmakers to do so.
The vote paves the way for eurozone finance ministers to open detailed talks on the bailout, worth up to €86 billion.
Finland’s parliament on July 16 approved the bailout talks – one of a number of eurozone states which require a mandate from their own parliament for Greece to secure new funds.
Germany’s parliament is due to vote on the deal on July 17.
Passionate opposition came from within Alexis Tsipras’ own Syriza party, with parliamentary speaker Zoe Constantopoulou calling the measures “social genocide”.
Former Finance Minister Yanis Varoufakis was another vocal opponent.
In his address to parliament Alexis Tsipras said: “I acknowledge the fiscal measures are harsh, that they won’t benefit the Greek economy, but I’m forced to accept them.”
Since capital controls were imposed and the banks shut on June 29, Greeks have been limited to withdrawing €60 a day.
German Finance Minister Wolfgang Schaeuble, known for his hardline approach, told national radio he would submit a request for parliament to reopen negotiations on the third bailout with “full conviction”.
He also said he believed a temporary “Grexit” – Greece leaving the eurozone – would perhaps be a better option.
Meanwhile Slovakia’s Finance Minister Peter Kazimir said in a tweet he welcomed “the positive vote” but said “this is the easier part of the deal”.
By July 22, Greece must also commit to a major overhaul of the civil justice system. It has to agree to more privatization, to review collective bargaining and industrial action, and make market reforms, including Sunday trading.
The Greek parliament vote on July 16 approved:
VAT changes including a top rate of 23% to take in processed food and restaurants; a 13% rate to cover fresh food, energy bills, water and hotel stays; and a 6% rate for medicines and books
An increase in corporation tax from 26% to 29% for small companies
An increase in luxury taxes on big cars, boats and swimming pools
An end to early retirement by 2022, increasing the retirement age to 67
Opponents of the bailout measures took to the streets of Athens in mainly peaceful protests ahead of the vote on Wednesday. However, one group threw petrol bombs at police officers who responded with tear gas.
Unions and trade associations representing civil servants, municipal workers and pharmacy owners also went on strike on July 15.
Greece will receive a third bailout after marathon talks in Brussels where eurozone leaders have reached the agreement.
EU chairman Donald Tusk has announced leaders agreed “in principle” on negotiations for the bailout, “which in other words means continued support for Greece”.
Greece’s PM Alexis Tsipras said that after a “tough battle”, his country had secured a “growth package” of €35 billion, and won debt restructuring.
The country will now have to pass reforms demanded by the eurozone by July 15.
“There will not be a <<Grexit>>,” said European Commission head Jean-Claude Juncker, referring to the widespread fear that if there had been no deal, Greece would have had to leave the eurozone.
Alexis Tsipras also said he had the “belief and the hope that… the possibility of <<Grexit>> is in the past”.
“The deal is difficult but we averted the pursuit to move state assets abroad,” he said.
“We averted the plan for a financial strangulation and for the collapse of the banking system.”
Jeroen Dijsselbloem, the head of the eurozone group of finance ministers, said the agreement included a €50 billion Greece-based fund that will privatize or manage Greek assets. Out of that €50 billion, €25 billion would be used to recapitalize Greek banks, he said.
Greek banks have been closed for two weeks, with withdrawals at cash machines limited to €60 per day. The economy has been put under increasing strain, with some businesses closing and other struggling to pay suppliers.
Eurozone finance ministers are due to meet later on Monday to discuss providing “bridge financing” that would cover Greece’s short-term needs.
Parliaments in several eurozone states have to approve any new bailout.
“The road will be long, and judging by the negotiations tonight, difficult,” German Chancellor Angela Merkel said on July 13.
French President Francois Hollande said the agreement had allowed Europe to “preserve integrity and solidarity”.
“We also had to show that Europe is capable of solving a crisis that has menaced the eurozone for several years,” he said.
Eurozone leaders had been meeting in Brussels for 17 hours, with talks continuing through the night.
During the talks, reports emerged that Greece was holding out over the proposed role of the International Monetary Fund (IMF) in a new program, and over the fund to hold Greek assets.
Eurogroup is due to resume talks in Brussels on a bailout deal for Greece.
Nine hours of talks on July 11 ended without agreement and Eurogroup leader Jeroen Dijsselbloem described negotiations as “very difficult”.
Eurozone finance ministers have expressed skepticism Greece will implement the austerity measures it has proposed.
They have little time to produce a working plan ready for European leaders who meet in Brussels later on Sunday.
“We have had an in-depth discussion of the Greek proposals, the issue of credibility and trust was discussed and also of course financial issues involved, but we haven’t concluded our discussions,” Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, told reporters as the earlier round of talks broke up.
“It is still very difficult but work is in progress.”
Talks are due to resume at 09:00 GMT.
Greek lawmakers have backed the latest measures proposed by PM Alexis Tsipras, despite the fact that many of the ideas were rejected by the Greek people in July 5 referendum.
Greek Finance Minister Euclid Tsakalotos is attending the talks in Brussels, trying to convince his counterparts that his government can be trusted to push through their economic reform plan.
Before talks began on July 11, Jeroen Dijsselbloem said there were concerns not just about “the content of the proposals, but also on the even more difficult issue of trust”.
“How can we really expect this government to implement what it’s now promising? I think it’s going to be quite a difficult meeting,” he said.
German Finance Minister Wolfgang Schaeuble said Greece would have to do more than promise reforms if it wanted more money.
“We will definitely not be able to rely on promises,” he said.
Reports on July 11 suggested that German ministers were drawing up a plan that would allow Greece to exit the eurozone temporarily if this weekend’s talks fail – something Athens says it is not aware of.
There were also unconfirmed reports that Finland had refused to agree to the new bailout proposals, although on its own it is unlikely to stop any deal going ahead.
Greece is asking creditors for €53.5 billion ($59.47 billion) to cover its debts until 2018.
However, the amount of the new bailout could reach €74 billion as Greece seeks a restructuring of its massive debt, which it says is unsustainable.
Of the €74 billion, €58 billion could come from the EU’s bailout fund, the European Stability Mechanism, with €16 billion from the IMF, sources have said.
As talks drag on, Greece’s financial situation is close to collapse.
Banks have been closed for two weeks and a €60 ($66) daily limit on cash machine withdrawals, imposed on June 28, remains in force for Greek citizens.
French PM Manuel Valls has said his country will do all it can to keep Greece in the eurozone, because allowing it to leave would be too risky.
“The basis for a deal exists,” Manuel Valls said ahead of an emergency eurozone summit.
However, Germany has warned against any unconditional debt write-off.
Eurozone ministers have called on Greece to put forward fresh proposals after Greek voters rejected the latest draft bailout deal in a referendum.
Greek PM Alexis Tsipras met Greek political party leaders on July 6 and headed to Brussels on July 7, where he is expected to present new proposals.
His plan is said to include a demand for Greece’s vast €323 billion ($356 billion) debt to be cut by up to 30%.
Greece’s teetering banks are to stay closed on July 7 and July 8.
The European Central Bank (ECB) is maintaining its pressure on the banks, refusing to increase emergency lending and ordering them to provide more security for existing emergency loans.
European finance ministers and officials gathered in Brussels told reporters they wanted to hear new proposals from Greece’s new finance minister, Euclid Tsakalotos, ahead of a full summit of eurozone leaders later.
“On Sunday the Greeks gave their voice but there are also 18 other countries with a voice,” cautioned European Economic Affairs Commissioner Pierre Moscovici.
Peter Kazimir, finance minister of Slovakia – one of the countries with the highest exposure to Greek debt – said he was “skeptical” that a deal would be found, adding that debt relief was a “red line for my country”.
In his comments on July 7, Manuel Valls said the eurozone could not “take the risk of Greece leaving” – for economic as well as political reasons.
“There is no taboo subject when it comes to [Greek] debt,” he told French radio.
Germany, which takes a tougher line, has warned against any unconditional write-off of Greece’s debt, amid fears it would destroy the single currency.
“The other 18 member states of the euro can’t just go along with an unconditional haircut [debt write-off],” said German economy minister and vice chancellor Sigmar Gabriel.
The differences between the French and German stances on Greece reflect a fissure running through the EU, say correspondents.
Several eurozone countries – including Malta, Slovakia and Estonia – are owed significantly more by Greece as a percentage of GDP than Germany or France.
Meanwhile, the ECB said it would keep emergency cash support for Greek banks, which are running out of funds and on the verge of collapse, at the same frozen level – refusing requests for additional support.
It told the banks to lodge more collateral – or assets – with the Bank of Greece, reducing the amount of spare cash the banks have.
Capital controls have been imposed, with people unable to withdraw more than €60 a day from cash points.
The European Commission – one of the “troika” of creditors along with the IMF and the ECB – wanted Athens to raise taxes and slash welfare spending to meet its debt obligations.
Greece’s Syriza-led left-wing government, which was elected in January on an anti-austerity platform, said creditors had tried to use fear to put pressure on Greeks.
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.
EU leaders have warned Greek people that rejecting international creditors’ proposals in the bailout referendum called for Sunday, July 5, would mean leaving the euro.
German Vice Chancellor Sigmar Gabriel said the vote would be “Yes or No to the eurozone”.
Greece’s PM Alexis Tsipras has urged a “No” vote but insists he wants Greece to stay in the euro.
Talks between Greece and its creditors broke down last week, leading to Greek banks having to shut this week.
Global stock markets saw big falls on Monday, June 29, after the weekend’s events.
As well as Sigmar Gabriel, the leaders of the eurozone’s other two largest economies said Greek voters would effectively be deciding whether or not they wanted to stay in the eurozone on July 5.
Italian PM Matteo Renzi said the choice would be between the euro and the drachma, while French President Francois Hollande said: “What’s at stake is… knowing whether the Greeks want to stay within the eurozone.”
Speaking to Greek television on June 29, Alexis Tsipras urged as many Greeks to vote “No” as possible on July 5 to give the Greek government a stronger position to restart negotiations.
He said his government had a mandate “to be within the European framework but with more justice”.
“They will not kick us out of the eurozone because the cost is immense,” he said.
Earlier, European Commission President Jean-Claude Juncker said he felt “betrayed” by the “egotism” shown by Greece in the failed talks on giving heavily indebted Greece the last payment of its international bailout.
Jean-Claude Juncker said Greek proposals were “delayed” or “deliberately altered” but added the door was still open to talks.
Despite the public war of words, a Greek official said Alexis Tsipras had spoken to Jean-Claude Juncker on June 26 and asked him to extend Greece’s bailout until the referendum.
A critical deadline looms on June 30, when Greece is due to pay back €1.6 billion to the IMF – the same day its current bailout expires. There are fears of a default and a possible exit from euro.
Jean-Claude Juncker said that he still believed a Greek exit from the euro was not an option and insisted that the creditors’ latest proposal meant more social fairness.
The question which will be put to voters on July 5 will not be as simple as whether they want to stay in the euro or not – instead it asks Greeks to approve or reject the specific terms laid out by Greece’s creditors:
“Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled <<Reforms for the completion of the Current Program and Beyond>> and the second <<Preliminary Debt Sustainability Analysis>>.
The Greek lawmakers have backed plans for a referendum on international creditors’ terms for a new bailout.
The July 5 referendum was called by Prime Minister Alexis Tsipras, who opposes further budget cuts. He urged voters to deliver a “resounding <<No>>” to the package.
Eurozone partners have criticized Greece’s referendum announcement, and rejected its request to extend the bailout program beyond June 30.
Greece could default on a €1.6 billion repayment to the International Monetary Fund (IMF) due on that day.
There are fears the country may leave the euro and that its economy may collapse without new bailout funds.
Alexis Tsipras’ motion on a referendum easily won backing in the 300-member strong parliament, with at least 179 lawmakers voting in favor of it in the early hours of Sunday, June 28.
Speaking just before the vote, Alexis Tsipras described the creditors’ proposal as “an insulting ultimatum” and said an emphatic “No” vote on July 5 would strengthen Greece’s negotiating position.
His government had earlier rejected the creditors’ offer of a five-month extension to Greece’s bailout program in exchange for reforms.
On June 28, eurozone finance ministers rejected the Greek proposal for the bailout extension beyond Tuesday’s deadline. A Eurogroup statement said Greece had broken off negotiations over a new bailout deal “unilaterally”.
Eurogroup head Jeroen Dijsselbloem said it would now be up to the European Central Bank (ECB) to decide whether to continue providing emergency liquidity funding to the Greek banking system.
Meanwhile, queues have formed in Greece outside banks in the past few days amid concerns that the central bank might start restricting withdrawals.
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 will offer new proposals to creditors ahead of an emergency EU summit planned for June 22, State Minister Alekos Flambouraris has said.
Alekos Flambouraris also told Greek media he believed the European Central Bank (ECB) would not allow the country’s banks to collapse.
Reports say billions of euros have been withdrawn from Greek banks in the past week.
The summit comes amid attempts to prevent Greece defaulting on a €1.6 billion IMF loan repayment.
The European Commission, the IMF and the ECB are unwilling to unlock bailout funds until Greece agrees to reforms.
They want Greece to implement a series of economic changes in areas such as pensions, VAT and on the budget surplus before releasing €7.2 billion of funds, which have been delayed since February.
Details of the new proposals have not yet been released.
Greek PM Alexis Tsipras has said he believes “there will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro”.
However, German Chancellor Angela Merkel has warned there must be a deal between Greece and its creditors ahead of June 22 summit.
Otherwise, Angela Merkel said, the summit would not be able to make any decision.
Alexis Tsipras was due to hold further talks with his negotiating team in Athens on June 20.
Greece has less than two weeks before the IMF loan repayment is due.
If Greece fails to make the repayment, it risks having to leave the eurozone and possibly also the EU.
On June 19, the European Central Bank (ECB) approved more emergency help for Greece’s banks. The amount of extra funding has not been officially disclosed.
Reuters news agency said withdrawals by Greek savers between Monday and Friday reached about €4.2 billion, which represents about 3% of household and corporate deposits held by Greek banks at the end of April.
Close to €1 billion was withdrawn on Friday alone, the financial website Euro2day said.
“There are no lines [queues] or panic, it has been a quiet and gradual phase of withdrawals,” one banker told Reuters.
A meeting of European finance ministers in Luxembourg ended with no agreement on Greece’s debt.
The head of the Eurogroup, Jeroen Dijsselbloem, has said that Greece needs to seize a “last opportunity” to reach a deal with its creditors.
Jeroen Dijsselbloem called on Greece to submit “credible” proposals in the coming days.
To help tackle the crisis, an emergency summit of leaders from Eurozone nations has been called for June 22.
Jeroen Dijsselbloem highlighted that “very little time remains” as Greece’s current bailout program runs out this month.
“It is still possible to find an agreement and extend the current program before the end of the month, but the ball is clearly in the Greek court to seize that last opportunity,” he said.
The Greek finance minister, Yanis Varoufakis, said his nation had presented a “comprehensive” proposal and that disagreement only existed over spending equivalent to 0.5% of Greek GDP, which he says does not constitute a “dangerous impasse”.
Yanis Varoufakis highlighted that Greece has already made a “gigantic adjustment” over the last five years and rejected any measures that would “jack-up” taxes and reduce benefits further.
He warned that negotiations were “dangerously close to a state of mind that accepts an accident”.
Greece has less than two weeks remaining to strike a deal with its creditors or face defaulting on an existing €1.6 billion loan repayment due to the IMF.
The country has already rolled a €300 million payment into those due on June 30.
If it fails to make the payment, Greece risks has to leave the eurozone and possibly also the EU.
The European Commission, the IMF and the European Central Bank (ECB) are unwilling to unlock bailout funds until Greece agrees to reforms.
They want Greece to implement a series of economic changes in areas such as pensions, VAT and on the budget surplus before releasing €7.2 billion of funds, which have been delayed since February.
Pressure was also raised on Greece today when the boss of the International Money Fund (IMF), Christine Lagarde, warned there was “no period of grace” for Greece over its impending debt repayment deadline.
Christine Lagarde said Greece would be in default on its loans from the IMF if it failed to make a €1.6 billion ($1.8 billion) payment on June 30.
The Bank of Greece has warned for the first time that the country could be on a “painful course” to default and exit from both the eurozone and the EU.
The central bank’s warning comes as the government and its international creditors blamed each other for failing to reach a deal over economic reforms.
That failure is holding up the release of €7.2 billion in bailout funds.
About €30 billion was withdrawn from Greek bank deposits between October and April, the central bank added.
The central bank also warned Greece’s economic slowdown would accelerate without a deal.
“Failure to reach an agreement would… mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and, most likely, from the European Union,” the Bank of Greece said in a report.
“Striking an agreement with our partners is a historical imperative that we cannot afford to ignore.”
Finance Minister Yanis Varoufakis, when asked if there could be an agreement at the meeting of euro zone finance ministers in Luxembourg on June 18, said: “I do not believe so.”
He said preparatory work for the meeting had not gone far enough for a deal.
Greek shares fell sharply again. The Athens General Index closed 3.2% lower which takes its loss for the past four trading sessions to almost 19%.
Austrian Chancellor Werner Faymann was in Athens on June 17 in a last-ditch bid to end the standoff.
“For Europe to be stronger, it must show solidarity and support to any country which needs it,” Werner Faymann said during a meeting with Greek President Prokopis Pavlopoulos.
That came ahead of a meeting of euro zone finance ministers on June 18 although officials have played down expectations of a make-or-break decision being reached.
The Austrian chancellor’s comments followed a harsher critique from European Commission President Jean-Claude Juncker, who on June 16 accused the Greek government of misleading voters, as Greek PM Alexis Tsipras accused the EU and International Monetary Fund (IMF) of trying to “humiliate” his country.
Greece has two weeks remaining to strike a deal with its creditors or face defaulting on an existing €1.6 billion loan repayment due to the IMF.
The country has already rolled a €300 million payment into those due on June 30.
Jean-Claude Juncker said the Greek government had not told the truth about its latest reform proposals.
“I am blaming the Greeks [for telling] things to the Greek public which are not consistent with what I’ve told the Greek prime minister,” he said.
PM Alexis Tsipras has said that the lenders wanted to raise VAT on electricity.
Other Greek ministers have criticized suggestions to increase sales tax on medicines.
Jean-Claude Juncker said: “I’m not in favor, and the prime minister knows that… of increasing VAT on medicaments and electricity. This would be a major mistake.”
“The debate in Greece and outside Greece would be easier if the Greek government would tell exactly what the Commission… are really proposing,” he added.
YanisVaroufakis claimed that EU proposals did include VAT increases: “Juncker either hadn’t read the document he gave Tsipras – or he read it and forgot about it.”
Elsewhere in the eurozone, Portugal’s short-term borrowing costs rose sharply on June 17, with yields on six-month treasury bills jumping from minus 0.002% to 0.044% at the country’s latest debt auction.
The rise came despite an assurance to investors from Portuguese PM Pedro Passos Coelho that his country would not be “the next to fall” in the event of a Greek default.
France’s President Francois Hollande has warned that there is “little time” to prevent Greece from leaving the eurozone.
On a visit to Algiers, Francois Hollande said the ball was firmly in Greece’s court.
“It’s not France’s position to impose on Greece further cuts to smaller pensions, but rather to ask that they propose alternatives,” the French president said on June 15.
“We have to get to work… everything must be done in order that Greece remains in the eurozone.”
Talks with Greek and EU officials in Brussels on June 14 failed to reach an agreement that would release bailout funds to Greece.
Eurozone finance ministers will meet on June 18, but Greek Finance Minister Yanis Varoufakis said he did not plan to present new proposals at the meeting.
Yanis Varoufakis told German newspaper Bild: “The Eurogroup [of eurozone finance ministers] is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before.”
The prospects of a Greek default in just over two weeks’ time has worried investors.
On June 15, the FTSE 100 in London fell 1.1% to 6,710 points, while the DAX in Frankfurt lost 1.9% and the CAC 40 in Paris shed 1.75%.
In the US, the Dow Jones closed down 0.6%, or 107 points, at 17,791.
Athens’ benchmark ATG index, which fell 5.9% on Friday, fell a further 4.7% on June 15.
Greek bank stocks were hit hardest, with National Bank of Greece closed down 5.7% and Bank of Piraeus was 12.2% lower.
Europe wants Greece to make spending cuts worth €2 billion to secure a deal that will unlock bailout funds.
Greece must repay more than €1.5 billion of loans to the International Monetary Fund (IMF) at the end of June and promise further economic reforms to receive about €7 billion of bailout funds.
The funds have been delayed by three months amid growing fears the government will soon run out of money.
Sticking points between Greece and the IMF and EU remain reforms to VAT and pensions.
European Commission spokeswoman Annika Breidthardt rejected an assertion that creditors were seeking pension or wages cuts. They only wanted Athens to phase out early retirement and remove “incorrect incentives for early retirement”.
Greece had already agreed to specific targets for its primary surplus, she said, with 1% of GDP this year, followed by 2% in 2016 and 3.5% by 2018.
An opinion poll for Greece’s Mega TV found that more than two thirds of respondents believe the Greek government will have to back down, with just 19.4% thinking the lenders will agree to further concessions.
On June 15, Greek PM Alexis Tsipras warned Athens would stand its ground until its creditors become “realistic”.
Alexis Tsipras called on the IMF and EU to “meditate” on the idea that: “We are not only the heirs of a long history of struggle. We are also carrying on our shoulders the dignity of a people, and the hope of the peoples of Europe.”
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.
Greece’s Finance Minister Yanis Varoufakis has said it is possible that a referendum could be held if the eurozone rejects the country’s debt renegotiation plans.
The comments came ahead of today’s Eurogroup meeting in Brussels, where Greece is to give detailed plans of its debt and growth terms.
Greek PM Alexis Tsipras reacted by urging Yanis Varoufakis to use “fewer words and more action”.
The finance ministry clarified that eurozone membership was not in doubt.
In an Italian newspaper interview on March 8 Yanis Varoufakis was asked what his options were if a deal was not agreed.
“If needed, if we encounter implacability, we will resort to the Greek people either through elections or a referendum,” he replied.
This was interpreted by some as a threat to leave the eurozone if talks broke down, something the Greek government was quick to deny.
Greek officials pointed out that the words “for the euro” had been added to Yanis Varoufakis’s remarks in brackets in the article. Greece’s eurozone membership was “a given” and did not form any part of negotiations with the Eurogroup, they added.
Yanis Varoufakis later criticized the reports as “willful attempts to undermine the good course” of attempts to agree a deal with creditors.
In a widely leaked letter to the Eurogroup, Yanis Varoufakis set out seven key reforms which he hopes will appease eurozone lenders and allow the next installment of bailout money to be released.
Greece aims to save €200 million through public spending cuts, as well as streamlining bureaucracy and cracking down on tax evasion.
European Commission Vice President Valdis Dombrovskis has rejected the letter, telling a German newspaper that “a letter here or there isn’t going to change much.”
He said Greece must first implement its reforms, adding that he did not expect a deal to be completed at March 9 meeting.
Greece needs to agree terms so that it will become eligible for more credit from the eurozone and the IMF. This would in turn allow its banks to finance themselves from the European Central Bank.
The Greek stock market fell by more than 4% at its open on Tuesday, February 17, after European finance ministers failed to reach a new deal to restructure the country’s debts.
Greek bank shares fell almost 9%, while the government’s borrowing costs rose, with the yield on a 10-year sovereign bond rising 82 basis points to 10.74%.
On Monday night, Greece rejected a plan to extend its €240 billion bailout.
Greek Finance Minister Yanis Varoufakis called the EU deal “absurd” and “unacceptable”.
However, Yanis Varoufakis declared he was ready to do “whatever it takes” to reach agreement over Greece’s bailout, despite the collapse of the talks.
He also said he was prepared to agree a deal under different conditions.
The Greek stock exchange recovered some ground as the day progressed, but at midday on Tuesday in Athens, it was still 2.25% lower.
Stock exchanges across Europe all fell in morning trade before recovering.
Germany’s main index, the Dax, was 0.35% lower and France’s blue chip index, the CAC-40, down 0.19% at mid-day.
In the UK, which has less exposure to Greece’s debt woes, the FTSE 100 Index which also started the day lower, had risen 0.45% by lunchtime.
JP Morgan claimed over the weekend that €2 billion worth of deposits was flowing out of Greek banks each week and estimated that if that were to remain the case, they would run out of cash to use as collateral against new loans within 14 weeks.
The investment bank’s estimate is based on a calculation that a maximum of €108 billion of deposits is left in Greek banks.
The most up-to-date figures from the Greek central bank show deposits dropped 2.4% month-on-month in December to €160.3 billion from €164.3 billion, marking the third monthly fall in a row.
Dutch Finance Minister Jeroen Dijsselbloem, who is also chairing the Eurogroup meetings of eurozone finance ministers, warned on Monday night there were just days left for talks.
Jeroen Dijsselbloem said it was now “up to Greece” to decide if it wanted more funding or not.
Ahead of Tuesday’s meeting, he said: “I hope they [Greece] will ask for an extension to the program, and once they do that, we can allow flexibility, they can put in their political priorities.
“Of course, we will see whether their program remains on track. But that is the way forward. It’s really up to the Greeks. We cannot make them or ask them. It really it really is up to them. We stand ready to work with them, also [over] the next couple of days.”
Greece’s current bailout expires on February 28. Any new agreement would need to be approved by national governments, so time is running out to reach a compromise.
Without a deal, Greece is likely to run out of money.
On Tuesday morning, Luxembourg’s Finance Minister, Pierre Gramegna, called for a greater degree of compromise on both sides.
“We can’t remain in a blockade, so everyone has to move a bit, water down demands, so we can find a compromise. There are flexibilities in the program, we have to make use of them,” he said.
“When the Greeks are against the programme and don’t want to work in this framework, it will be tough.”
Yanis Varoufakis said on Tuesday ministers would “continue to deliberate”, in order to enhance the chances of a deal.
He added he wanted to achieve “a very good outcome for the average European. Not for the average Greek, the average Dutch person or the average German”.
“We know in Europe how to deliberate in such a way as to create an honourable solution out of an initial disagreement,” Yanis Varoufakis said.
Greece has proposed a new bailout program that involves a bridging loan to keep the country going for six months and help it repay €7 billion of maturing bonds.
The second part of the plan would see Greece’s debt refinanced. Part of this might be through “GDP bonds” – bonds carrying an interest rate linked to economic growth.
Greece also wants to see a reduction in the primary surplus target – the surplus the government must generate (excluding interest payments on debt) – from 3% to 1.49% of GDP.
Two opinion polls last week indicated that 79% of Greeks supported the government’s policies, and 74% believed its negotiating strategy would succeed.