Greece dispatches team to secure last-minute debt deal
June 13 2015 02:09 PM
Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

 

AFP/ Athens

Greek premier Alexis Tsipras dispatched a team of his top advisers to Brussels on Saturday to thrash out a deal to avert a default by Greece that European officials now say could be imminent.

The leftist government in Athens will offer its international creditors, the EU and IMF, a latest proposal it says is enough to end a five-month war of nerves to unlock vital bailout funds, avert a default and keep Greece from crashing out of the euro.

"We will have a deal... The fact that the Greek delegation is going to Brussels is a good sign," deputy finance minister Dimitris Mardas told Skai TV in Athens.

Whatever needs to be done "needs to be done quickly", he said, amid reports in Athens that the Greeks would offer concessions on key red lines.

The delegation was expected in Brussels later on Saturday and would sit down with top negotiators from the EU commission, the ECB as well as the IMF.

The urgency increased exponentially on Friday when Europe's top economic officials said they had for the first time ever discussed the prospects of Athens defaulting on their huge debts.

"In discussions, a default was mentioned as one of the scenarios that can happen when everything goes wrong," a eurozone official told AFP on condition of anonymity after talks in Bratislava Friday.

 

- Eurozone bombshell -

The bombshell came a day after the International Monetary Fund, Greece's most hardline creditor, pulled its technical team from Brussels because it was dissatisfied with the state of the negotiations.

The Athens stock market crashed 6 percent when news of the contingency plans emerged, and fears are high that markets could tumble further Monday without signs of progress in talks over the weekend.

The long-running saga over Greece's refusal to agree on reforms demanded by its creditors is set to reach a climax at a meeting of eurozone finance ministers in Luxembourg on Thursday.

A deal to unlock the last 7.2 billion euros ($8.1 billion) of Greece's international bailout is needed by then to give national parliaments time to approve it before the bailout expires on June 30.

Also on June 30, Greece faces a huge 1.6 billion euro payment to the IMF and a further 3.4 billion euros to the European Central Bank on July 20.

Talk of a plan B if Athens should miss payments has been a huge taboo among Greece's eurozone partners and the switching of gears is the first real sign that they are willing to walk away from the table.

No specifics are known on what such a plan would look like, but it is believed to include the introduction of capital controls in Greece, closure of the banks, and the government issuing IOUs keep the public sector financially afloat.

Asked if he thought the Europeans were bluffing, Greek Finance Minister Yanis Varoufakis said: "I hope they are".

"I don't believe that any sensible European bureaucrat or politician will go down that road (of Greece default)," the outspoken Varoufakis added, speaking to BBC radio in London.

These drastic measures would also pave the way for an exit by Greece from the euro, but officials are for now ruling out that possibility.

"We have to evaluate all the possibilities but I hope that the Greek government will grasp the seriousness of the situation," Lithuania's Finance Minister Rimantas Sadzius told AFP on Friday.

 

- Ratings cuts -

Standard & Poor's on Friday, meanwhile, lowered the rating of Greece's four big banks, and said in a statement that the lenders "will likely default in the next 12 months in the absence of an agreement between the Greek government and its official creditors".

Underlining the growing frustration with Athens, a new poll showed a majority of Germans now want Greece out of the eurozone.

A narrow majority (51 percent) of Germans polled this week by ZDF television said they are opposed to Greece still being inside the euro club. Six months earlier, only 33 percent were against.

 

 

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