Europe demands new Greek debt plan at crisis summit

Source:AFP Published: 2015-7-8 0:28:01

European leaders warned Greek Prime Minister Alexis Tsipras to submit new bailout proposals at an emergency summit on Tuesday or risk leaving the euro, after Greeks defiantly voted "No" to further austerity.

The radical leftist leader will face his 18 eurozone counterparts in Brussels as the country's economy gasps for air, with banks closed until at least Thursday amid fears the Greek financial system is imploding.

German Chancellor Angela Merkel and French President Francois Hollande presented a united front when they met in Paris on the eve of the make-or-break summit, urging Tsipras to make "precise" proposals in order to restart talks.

Their tough stance was echoed by eurozone finance ministers and officials meeting hours before the summit, who warned that without a "credible" reform plan from the Greeks they could rule nothing out.

"Personally I am skeptical a deal will be found," Slovakian Finance Minister Peter Kazimir told reporters.

When asked if a so-called "Grexit" from the single currency was possible, EU Commissioner for the euro Valdis Dombrovskis said: "If trust is not rebuilt, if there is no credible reform package, it cannot be excluded."

The summit comes two days after Greeks rejected reform terms for a new EU-IMF bailout in a hastily-arranged referendum that was a political victory for Tsipras but infuriated Europe.

Tsipras is expected to call for debt relief to cut Greece's massive 320 billion euro ($350 billion) debt mountain but that is a red line in many European capitals, especially in Berlin and the newer eastern members of the eurozone.

Paris and Berlin remain divided despite the Merkel-Hollande display of unity, with Germany's Economy Minister Sigmar Gabriel insisting that talks on reducing Greece's debt were impossible before Athens implements reforms.

But French Prime Minister Manuel Valls insisted that a Greek exit from the currency it joined in 2001 was not an option, drawing the line much more firmly than austerity-minded Berlin has so far.

"France is convinced that we can't take the risk of Greece leaving the eurozone," Valls told French radio, adding that France would do "everything" to keep it in. A bridging loan is another possibility to get Greece through a huge payment of more than 3 billion euros to the European Central Bank on July 20, reports say.

Posted in: Europe

blog comments powered by Disqus