Greece’s partners in the eurozone are right in demanding reform proposals from Athens after its voters rejected bailout conditions imposed on the crisis-hit nation.
The Greek government must propose ways to dig itself out of its economic crisis at eurozone talks planned today in Brussels, although Germany has stuck to its consistently hard line with Chancellor Angela Merkel saying there is no basis for negotiations for a new rescue package for Athens.
The meeting of eurozone’s finance ministers in Brussels today followed by a summit of eurozone heads of states will give a clear indication of things to come.
The meetings are being held after numerous failed attempts to reach a deal for releasing further bailout money for Athens led to Sunday’s referendum, in which 61 per cent of voters said “NO” to the latest bailout deal on offer.
French Finance Minister Michel Sapin said on broadcaster Europe 1 that because of a “very thin thread of dialogue” with Greece, it was up to Athens to make “serious and solid proposals.”
But he added that debt relief, which Greece has demanded, should be considered. A spokesman for German Finance Minister Wolfgang Schaeuble, however, ruled out a debt restructuring ahead of yesterday’s meeting on the crisis between the conservative Merkel and Socialist French President Francois Hollande.
While Sapin said the “NO” vote in Sunday’s referendum does not mean Greece’s automatic exit from the eurozone, Finnish Finance Minister Alexander Stubb said, “The near future will be very difficult for Greece.”
It is highly unlikely, however, that an agreement with Athens will be reached swiftly considering the long process to approve a rescue deal.
While, much of the criticism Greece has been copping over its financial difficulties are justified, it would be comforting for the country that some also view its problems sympathetically and have called for a compassionate approach.
President Sergio Mattarella of Italy, which itself is heavily indebted and has just emerged from its worst postwar recession, said “Greece is part of Europe” and cannot be abandoned by its EU partners. Foreign Minister Paolo Gentiloni spoke out for a new agreement with Greece.
Austria’s Social Democratic chancellor, Werner Faymann, said, “The rising poverty in Greece calls for concrete humanitarian measures.”
EU President Martin Schulz added that “ordinary citizens, pensioners, sick people or children in the kindergarten should not pay a price for the dramatic situation in which the government brought the country now.”
The immediate effects of the Greek referendum were felt across the world yesterday with stock markets in the US and Europe posting lows in early trading. However, it is difficult to see the trend continue for long because it could lead to a ripple effect and hit other nations.
As of yesterday evening, the IMF had announced it was ready to help Greece and Prime Minister Alexis Tsipras was heading to Brussels for the summit with new proposals. It would be in the world’s interest to ensure that an agreeable solution is worked out earnestly.
