Date
20 July 2017
Greek Prime Minister Alexis Tsipras is seeking a last-minute rescue at an emergency eurozone summit in Brussels on Tuesday. Photo: Reuters
Greek Prime Minister Alexis Tsipras is seeking a last-minute rescue at an emergency eurozone summit in Brussels on Tuesday. Photo: Reuters

Prospects of new Greek rescue rise at eurozone summit

Greek Prime Minister Alexis Tsipras was seeking a last-minute rescue at an emergency eurozone summit in Brussels on Tuesday, days before his country’s banks run out of money.

EU leaders are scheduled hold a further summit on Sunday to approve a plan to aid Greece if creditor institutions are satisfied with the country’s loan application and reform commitments, Reuters reported.

“The ball is in Greece’s court,” Italian Prime Minister Matteo Renzi was quoted as saying. “Next Sunday the final meeting will take place on Greece … I am not pessimistic.”

German Chancellor Angela Merkel, who arrived saying there was still no basis for reopening negotiations with Athens, changed her tune in the room and was actively involved in efforts to find a last-ditch solution, the news agency said, citing eurozone sources.

Merkel said she expected a formal loan request from Athens on Wednesday and more detail on how Greece would cooperate to make its economy more competitive on Thursday, in order to seek the approval of the German parliament to start negotiations.

“We all share responsibility for the euro,” she said of the decision to invite all EU leaders on Sunday — a timetable she said reflected the danger of the situation and the urgent need for a solution.

Short-term finance could also be made available if the Greek government came up with satisfactory proposals and took “prior actions” in passing laws to convince creditors of its intent.

Austrian Chancellor Werner Faymann warned, however, that if there were no deal on Sunday, eurozone governments would have to prepare “Plan B” — code for Greece losing all access to euros and so finding itself excluded from the currency area.

With Greek banks down to their last few days of cash and the European Central Bank tightening the noose on their funding, Tsipras tried to convince the eurozone’s other 18 leaders to authorize a new loan swiftly.

People familiar with Greece’s financial system said the banks could start running out of money within two days unless there was an international rescue.

However, eurozone sources in Brussels said ECB President Mario Draghi had assured finance ministers that the central bank would keep Greek lenders afloat this week as long as negotiations were under way.

Merkel and French President Francois Hollande worked together on a plan to save Greece from plunging into economic turmoil and possibly having to ditch the euro.

This involved a medium-term conditional program and a short-term interim financing deal for a few months, the sources said.

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RA/CG

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