Greek debt talks go into weekend as default deadline looms

[webfact]

Greek debt talks go into weekend as default deadline looms
DEREK GATOPOULOS, Associated Press
RAF CASERT, Associated Press

BRUSSELS (AP) — The bitter standoff between Greece and its international creditors was extended into the weekend, just days before Athens has to meet a crucial debt deadline which could decide whether it goes bankrupt and gets kicked out of the euro currency club.

A key meeting of eurozone finance ministers broke up without agreement on Greece's rescue package on Thursday, intensifying doubts about whether Athens can pay the International Monetary Fund a debt worth 1.6 billion euros ($1.8 billion) on Tuesday.

An agreement on a drastic Greek tax and austerity reform package is necessary for creditors to unfreeze 7.2 billion euros (8.1 billion dollars) in bailout money that would get Prime Minister Alexis Tsipras off the hook.

"European history is full of disagreements, negotiations and at the end, compromises," Tsipras said. "So, after the comprehensive Greek proposals, I am confident that we will reach a compromise."

Lower-level negotiations will continue and a new meeting of eurozone finance ministers is tentatively scheduled for Saturday.

The breakup of the eurozone meeting was the latest in a series of negotiating roadblocks, and a major setback since there had been hopes to reach a deal in time for European leaders to approve it at a summit later Thursday.

The blockage happened after leaders from the IMF, the European Central Bank and the European Commission raised the stakes by putting forward their joint position on the reforms they would accept to offer Greece a financial lifeline. But Greece, objecting to what it saw as outside interference, was still not on board, and wanted to stick to a previous plan it had offered.

Greek Finance Minister Yanis Varoufakis said several ministers within the 19-nation eurozone found that Athens was being pushed too hard. "Interestingly, several colleagues disagreed and criticized not only our text but also the text of the institutions," he said.

Greece's most influential creditor, Germany, had never been optimistic about a breakthrough Thursday.

The Greek government so far has "not moved, rather moved backward," said German Finance Minister Wolfgang Schaeuble. He said the chances for success now "lies exclusively with those responsible in Greece."

In Washington, the IMF said Greece wouldn't get any extra time to make the debt repayment due Tuesday.

"We're expecting the payment to be made June 30," IMF spokesman Gerry Rice said, adding that Greece will be granted no extensions.

A default on its debts could force Greece out of the eurozone, which would be hugely painful for the country. Some experts say it could be manageable for Europe and the world economy, but that remains unclear and any failure would likely shake global markets.

"When Greece, Europe, the eurozone is at stake, we have to know how to finish negotiations," French President Francois Hollande said.

Tsipras is under massive pressure from Greeks themselves as the compromises suggested so far will mean more hardship for citizens already suffering the impact of past austerity measures to bring public spending into line.

According to Greek officials at the talks, creditors are seeking a different mix of austerity measures than those proposed by Athens, making the cuts more immediate.

They include broad pension cuts, higher revenue from sales tax, and a faster elimination of tax exemptions — demands that are likely to fuel dissent within the government if accepted.

Representatives from almost every Greek party were in Brussels, following developments blow by blow, to see whether they would be able to back any new deal in the Greek parliament, where a vote must pass by Monday.

"We are at a critical moment," Greek Labor Minister Panos Skourletis warned on private Antenna television.

He said on of the key issues Greece wanted included in an agreement was making the country's existing debt load more sustainable. Creditors have said in the past they would consider that, by either lowering the interest rates or extending repayment dates on Greece's bailout loans. But they are balking at discussing the issue now, preferring to first get Greece the loans it needs to avoid default next week.

Amid the uncertainty over Greece's future, bank deposit holders have been pulling money out of the banks. That has forced the European Central Bank to increase emergency credit to the Greek banks on a daily basis since last week.

Experts say that if Greece does not reach a deal, it could have to put limits on money withdrawals soon.

Miranda Xafa, senior fellow at the Center for International Governance Innovation and a former IMF official, said that the talks were now "more a matter of signing a deal, even a painful deal" that would cover Greece for three to nine months.

If no deal is struck quickly, she said, Greece could see "capital controls as early as next week."

Despite the uncertainty, investors held their nerve. The Stoxx 50 index of European shares closed unchanged on the day while the Athens Stock Exchange edged up 0.1 percent.
____

Lorne Cook in Brussels, Elena Becatoros in Athens, Paul Wiseman in Washington and David McHugh in Frankfurt, Germany, contributed to this report.


-- (c) Associated Press 2015-06-26

[Anthony5]

Do they talk about this weekend only, or also the weekends after the deadline?

[shirtless]

They need to go full stop they cannot pay and will never be able to pay. Socialism doesnt work with the stupid politicians we have running our countries.Most western countries are all heading in the same direction and thats south.

[DeepInTheForest]

Greece came up with considerable concessions,including a promise to have their budget 1% in the black in 2015 and 2% in 2016. This would mean a lot of difficulties in terms of the economy, and would certainly cause suffering among the Greek population, but the European credit holders aren't satisfied. Schauble and the rest of the troika hardliners seem, in my admittedly layman's remote view, to be certified nutters whose ideology pushes them to punish, in a very vindictive manner. The pension system is a particular target-- they want a solution that involves less taxation (of the rich) and a much reduced social safety net. It's as if the Euro policymakers, through clenched teeth, are saying "You will not have social welfare!! People must be sacrificed!!" They love austerity so much. It hasn't worked in the past, it's not working now, and it's not gonna work in the future, but you know how the neoliberal mindset operates. The Euro financial elites also want to punish Greece simply for having the temerity to stand up to them, and a have a particular animus to destroy this left-leaning government. Things are very ideological with the troika leaders; it's gone beyond a question of economics now. Were the Greek leaders to cave in to all the creditor demands, they would have nothing to show to the people who elected them. That would probably cause a political and social crisis in Greece.

In the meantime-- speaking of the law of unintended consequences-- Switzerland of all places is starting to feel considerable pressure because of the strengthening of the Swiss franc, which if prolonged, will produce a crisis in their economy as exports dry up. We'll have to see how that plays out.

A Grexit may possibly be more damaging to the EU than to that small country. Greece would be unburdened by the crushing debts that have it pinned today. Yes, it will have to print its own currency, and there will be problems with inflation, and who knows how things will be in the short term. But the EU may find itself in for a series of future crises. The currency union is the most precarious aspect of things. If nations cannot devalue their currency, they will be forever at the mercy of shifts in the deployment of capital, and will be unable to craft a response. Other nations may follow the Greek path, particularly if it is not a desperate failure. And if they have any interest in history, the troika leaders will not want to have the collapse of the EU and its monetary union as their legacy.

We're in the end game now-- only days left before default comes crashing through the front door. The Greek nations owes something less than $2 billion, due on July 1. Such a paltry sum for one of our leading billionaires. You would think one of them would step up and throw down a couple bills as an act of noblesse oblige, with no strings attached. God knows they could afford it.

A few worthy reads below:

http://www.theguardian.com/commentisfree/2015/jun/25/greece-blackmailed-eurozone-troika-syriza-common-currency

http://www.theguardian.com/business/2015/jun/25/weekend-deadline-greece-after-negotiations-draw-blank

http://www.theguardian.com/commentisfree/2015/jun/23/deal-heaps-more-misery-greeks

Edited June 26, 2015 by DeepInTheForest

[AlexRRR]

Im no financial wiz kid but gee why keep pandering to the euro zone?

Trading within the zone is one thing but but everyone using the same currency always loved doggie to us from a far off land, never was going to work once some poo hit the fan, was very obvious that economically all nations were not equal within the zone.

Like all great empires they eventually crumble and so will the euro zone just a matter of time.

[Ulic]

I just can't see a solution that Greece and the EU will sign off on. Greece will want/need a third

and possibly further bail outs. They see it as there god given right to continue spending and

promising collection/payment later, the Troika does not want to walk away from 320 billion Euro but

also don't want to throw good money after bad. The best solution I see is for the EU to take its lumps

loosing its money and the Greeks to devalue its currency, lower its standard of living suffer the

consequences of electing successive governments that promised everything, spending other peoples

money like drunken sailors on shore leave. While suffering, the should take some comfort knowing

they got about 500 billion Euro out of the EU and will be no worse off than when they joined. They

got a free 20 year vacation paid for by the foolish EU number crunchers that believed the numbers

turned over for audit that allowed them to join. The new phrase "Trust but verify" come to mind.

Bernie Madoff, World Com, Enron, BREX, Country Wide, etc, etc.... come to mind.

We shall see what unfolds in the next few days.

[Cats4ever]

Interesting article in the Age (Melbourne) a couple of days ago. Only 6 countries have never defaulted - Oz, NZ, Canada, Denmark, USA & Thailand. Greece has had several events since it regained independence.

[Ulic]

Greece came up with considerable concessions,including a promise to have their budget 1% in the black in 2015 and 2% in 2016. This would mean a lot of difficulties in terms of the economy, and would certainly cause suffering among the Greek population, but the European credit holders aren't satisfied. Schauble and the rest of the troika hardliners seem, in my admittedly layman's remote view, to be certified nutters whose ideology pushes them to punish, in a very vindictive manner. The pension system is a particular target-- they want a solution that involves less taxation (of the rich) and a much reduced social safety net. It's as if the Euro policymakers, through clenched teeth, are saying "You will not have social welfare!! People must be sacrificed!!" They love austerity so much. It hasn't worked in the past, it's not working now, and it's not gonna work in the future, but you know how the neoliberal mindset operates. The Euro financial elites also want to punish Greece simply for having the temerity to stand up to them, and a have a particular animus to destroy this left-leaning government. Things are very ideological with the troika leaders; it's gone beyond a question of economics now. Were the Greek leaders to cave in to all the creditor demands, they would have nothing to show to the people who elected them. That would probably cause a political and social crisis in Greece.

In the meantime-- speaking of the law of unintended consequences-- Switzerland of all places is starting to feel considerable pressure because of the strengthening of the Swiss franc, which if prolonged, will produce a crisis in their economy as exports dry up. We'll have to see how that plays out.

A Grexit may possibly be more damaging to the EU than to that small country. Greece would be unburdened by the crushing debts that have it pinned today. Yes, it will have to print its own currency, and there will be problems with inflation, and who knows how things will be in the short term. But the EU may find itself in for a series of future crises. The currency union is the most precarious aspect of things. If nations cannot devalue their currency, they will be forever at the mercy of shifts in the deployment of capital, and will be unable to craft a response. Other nations may follow the Greek path, particularly if it is not a desperate failure. And if they have any interest in history, the troika leaders will not want to have the collapse of the EU and its monetary union as their legacy.

We're in the end game now-- only days left before default comes crashing through the front door. The Greek nations owes something less than $2 billion, due on July 1. Such a paltry sum for one of our leading billionaires. You would think one of them would step up and throw down a couple bills as an act of noblesse oblige, with no strings attached. God knows they could afford it.

A few worthy reads below:

http://www.theguardian.com/commentisfree/2015/jun/25/greece-blackmailed-eurozone-troika-syriza-common-currency

http://www.theguardian.com/business/2015/jun/25/weekend-deadline-greece-after-negotiations-draw-blank

http://www.theguardian.com/commentisfree/2015/jun/23/deal-heaps-more-misery-greeks

While I agree in theory the two things the Greeks have clearly demonstrated is has zero ability to collect

taxes, and a great ability to spend money. Segments of the population have been allowed to retire at

50 with a full pension. A great vote getter in the past but money was never set aside. While I agree

people with 500 euro a month pension should be protected, but what are the other pensions like. We only

here about the low end, what is the full picture. Remember many Greeks are asset rich but cash poor. Most

Greeks own there homes, most Germans do not and rent for life. I am not sure how fare it is for home owners

to have there lifestyle subsidized by renters. It is the national game in Greece to hide money and not pay taxes.

Greece should get tough on tax fraud. Outlaw Greek citizens from having accounts in tax avoidance

countries like Switzerland. Minimum 10 year sentence and confiscation of all assets. The US is getting

tough as it has the muscle to force banks to comply or risk being banned from conducting business in the US.

Now I may not agree on the way the US have gone about the tax filing requirements of ex-pats living

around the world, but there must be a way to bring Greeks who have not been fully paying there taxes

to account.

[MaeJoMTB]

Greece should tell the bankers to clear off and let the Eurozone do one.

Time a country stood up to it's German overloads.

[Srikcir]

Greece should tell the bankers to clear off and let the Eurozone do one.

Time a country stood up to it's German overloads.

Yes....who needs Euros when you can use olive pits for money.