Tags: greece | europe | default | debt

Greek Deadlock Has Leader Hoping for Miracle to Avoid Default

Tuesday, 16 Jun 2015 07:48 AM

Greece snubbed European pleas to submit a proposal to avert a default, dimming chances of a compromise at a key meeting this week.

The country needs to seal an accord or get an extension before the euro area’s bailout expires on June 30, or risk missing payments on its debt of about 313 billion ($354 billion) euros.

Stocks fell for a third day amid reports that an emergency meeting of Europe’s leaders is being considered.

“We need a miracle to resolve this next weekend,” Finnish Prime Minister Juha Sipila told reporters in Helsinki.

Greek Prime Minister Alexis Tsipras was scheduled to address lawmakers from his party in Parliament this afternoon in Athens.

While Europe’s leaders seek a solution to Greece’s funding difficulties, they also have unofficially discussed a possible default, Sipila said. Talk of an emergency leaders’ summit has so far not advanced to more formal planning stage, according to a creditor official who spoke on condition of anonymity.

Finance Minister Yanis Varoufakis told Bild newspaper that any new proposals would need to be thrashed out at a lower level before they could be presented to the finance ministers set to meet June 18 in Luxembourg. A Greek government official, who asked not to be named in line with policy, said the government hasn’t submitted a new plan.

Stocks Drop

The Athens Stock Exchange Index fell 3.4 percent on Tuesday, while the Athex Banks Index dropped 4.7 percent at 1:36 p.m. local time. Concern is also starting to spread to other markets. Spanish government bonds dropped, pushing the 10-year yield above 2.5 percent for the first time since August, while Italian and Portuguese bonds also declined.

Finance Ministry officials from the 19-nation euro zone are due to hold a Greece call on Tuesday afternoon.

Europe needs a “strong and comprehensive agreement, and we need this very soon,” European Central Bank President Mario Draghi told lawmakers at the European Parliament in Brussels on Monday. “While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps.”

Greece disputes that characterization. The government has said that it was awaiting an invitation from its creditors to proceed.

“The Greek side remains ready to conclude the negotiations,” the government said in e-mailed statement on Tuesday.

With both sides digging in, some euro-area officials publicly raised the prospect of Greece’s exit from the currency region as the Greek government suggested it had reached the limits of its ability to make concessions. Greece is resisting demands for further cuts in pension spending as well as tax increases.

Difficult to Understand

Michael Grosse-Broemer, the parliamentary majority whip for Chancellor Angela Merkel’s party, said on Tuesday that a Greek exit from euro area is possible if a “solid” agreement doesn’t emerge.

“This permanent position of denial is for me and many others in the caucus very difficult to understand,” he told reporters in Berlin.

Government backers plan to rally on Wednesday night at the central square in Athens.

Tsipras, in a statement on Monday, portrayed Greece as the torchbearer of democracy, standing firm against creditors’ demand for pension cuts.

“One can only suspect political motives behind the fact that the institutions insist on further pension cuts, despite five years of pillaging,” Tsipras said. Greece will wait patiently until “the institutions adhere to realism.”


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Greece snubbed European pleas to submit a proposal to avert a default, dimming chances of a compromise at a key meeting this week. The country needs to seal an accord or get an extension before the euro area's bailout expires on June 30, or risk missing payments on its debt...
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Tuesday, 16 Jun 2015 07:48 AM
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