Economy Greece debt crisis: Talks to resume in Brussels

Greece debt crisis: Talks to resume in Brussels

Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

Greek PM Alexis Tsipras is due to resume talks with international creditors with time running out to find a solution to Greece’s debt crisis.

Late night talks with the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) adjourned without agreement.

But they still hope to thrash out a deal before eurozone finance ministers meet at 13:00 local time (11:00 GMT).

Greece must repay a €1.6bn (£1.1bn) IMF loan by next Tuesday or face default.

That could lead to Greece exiting the eurozone, with possible repercussions for the rest of Europe and the world economy.

“The Greek government remains firm on its positions,” a Greek official told reporters after two hours of overnight talks in Brussels broke up early on Thursday.

An earlier round of talks on Wednesday – that lasted seven hours – failed to produce a breakthrough.

As he headed into the talks, Mr Tsipras criticised creditors for rejecting his latest reform proposals, which they say are not viable.

Negotiators resumed discussions at 06:00 local time (04:00 GMT) with Mr Tsipras due to meet creditors at 09:00 (07:00 GMT), Greek officials said.

On Wednesday, eurozone finance ministers cut short an emergency meeting meant to finalise a deal, when it became clear there was no deal to discuss.

“Unfortunately we have not reached an agreement yet, but we are determined to continue work,” Eurogroup chairman Jeroen Dijsselbloem said.

Ministers now hope to approve a deal that can then be rubberstamped by national leaders meeting in Brussels on Thursday for a two-day EU summit.

Only once agreement is reached will creditors unlock the final €7.2bn tranche of bailout funds for cash-strapped Greece.

The latest Greek proposals are believed to include:

  • New taxes on businesses and the wealthy
  • Selective increases in VAT
  • Savings in pensions linked to curbing early retirement and increasing pension contributions
  • No further reductions in pensions or public-sector wages – “red lines” for Greece’s left-wing Syriza government
  • The Greek government has put forward budget proposals that it says meet the targets demanded by its creditors.

But correspondents says they include far more tax rises and far fewer spending cuts than creditors had suggested, and the IMF in particular is refusing to accept them.

This prompted Mr Tsipras to tweet on Wednesday: “The repeated rejection of equivalent measures by certain institutions never occurred before – neither in Ireland nor Portugal.

“This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed.” he appeared to be alluding to fears that there are those elsewhere in the eurozone who want to put him in an impossible position, and engineer the collapse of his radical left-wing government.

If agreement is reached, it will have to be endorsed by Greece’s parliament, with some critics at home accusing the prime minister of reneging on his party’s campaign pledge to end austerity.

The Greek crisis threatens to overshadow the EU summit opening on Thursday afternoon.

Also on the agenda will be the migration crisis, which has seen thousands of illegal migrants arriving in southern Europe, and security concerns in the wake of the conflict in Ukraine.

UK Prime Minister David Cameron will also outline his plans for reform of the EU ahead of an in/out referendum to be held in Britain before the end of 2017.