EU

Summit suspended to seek Greek deal

Published

11 years ago

July 12, 2015

The eurozone summit is put on hold to enable leaders to meet Greek PM Alexis Tsipras separately to agree to a debt rescue package. Germany's Chancellor Angela Merkel has called the talks on Greece's debt rescue "extremely difficult" and ruled out "agreement at any price".

She was speaking as she arrived in Brussels for a meeting of the other 18 eurozone leaders to discuss the deal.

They are considering proposals by eurozone finance ministers which would impose tough conditions on Athens.

Greece risks being ejected from the eurozone if a deal to rescue it from financial collapse is not reached.

Finnish Finance Minister Alex Stubb said one condition in the ministers' proposal requires Greece to implement new laws by Wednesday (15 July°.

Greece will also be required to introduce tough conditions on labour reform, VAT and taxes, and tough measures on privatization and privatization funds, Mr Stubb told reporters.

The head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said a "couple of big issues" remain which would be left to the heads of government to rule on, though he did not give details.

Merkel told reporters that the eurozone leaders would be considering whether "the conditions are met" to start negotiations on a third bailout.

"That's what is at stake, nothing more and nothing less," she said.

But she warned that there would be "no agreement at any price", adding: "We have to make sure the pros outweigh the cons - for Greece's future, for the entire eurozone and the principles of our collaboration."

Tsipras was more upbeat, telling reporters: "I'm here ready for an honest compromise... we can reach an agreement tonight if all parties want it."

Chancellor Merkel and other eurozone leaders say there can be no third bailout unless trust is restored with the leftist Greek government.

After months of delay and political upheaval in Greece this is a make-or-break summit - not least because Greek banks are desperately short of cash.

A deal tonight could pave the way for a third bailout - but the process is fraught with uncertainty.

A deal would require Greece to enact laws immediately to reform its pension system, sales tax (VAT) and labour market.

Ambitious privatisation is required too - something that has been delayed for years.

But the Finnish and German parliaments have to vote even to allow new bailout talks to start.

The future of the euro is at stake - and that is concentrating minds.

Prior to the finance ministers meeting, many had spoken of a breakdown in trust between Greece and other eurozone nations over the negotiations.

Reports on Saturday 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.

This idea was also dismissed by France's President Francois Hollande who said: "There is no temporary Grexit, there is a Grexit or there is not a Grexit."

He said France would "do everything to find a deal tonight, allowing Greece, if the conditions are met, to remain in the eurozone and allowing Europe to progress".

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