Greece and Creditors again at crossroads

Noam Stiekema

Greek Prime Minister did not presented at the negotiating table at the summit of G7 in Germany, but was the main point of discussion. The unresolved debt crisis in Greece negatively affected the meeting of the most powerful industrial nations in the world. Jean-Claude Juncker called a press conference at the palace on Sunday morning. […]

Greece EU crossroads

Greece EU crossroadsGreek Prime Minister did not presented at the negotiating table at the summit of G7 in Germany, but was the main point of discussion. The unresolved debt crisis in Greece negatively affected the meeting of the most powerful industrial nations in the world. Jean-Claude Juncker called a press conference at the palace on Sunday morning. By this time President of the European Commission was the one who showed the greatest understanding to Greece Greek Prime Tsipras. But now it seems that even Juncker began to lose patience. Luxembourg politician seems nervous, and parts of his remarks remind angry speech. Tsipras is apparently alienated perhaps the most important lawyer in Brussels.

But definitely there is a reason Juncker to be angry. The creditors desperately sought a decision in the Greek debt drama last week. If creditors do not pay the last tranche of the aid in late June, Greece is seriously threatened with bankruptcy – with unforeseeable consequences for the country and for the Eurozone. But the remaining 7.2 billion EUR will be paid to Athens only when Greece is committed to a new program of reforms. On the other hand, the government in Athens is reluctant to accept such a proposal to the creditors.

By midweek creditors hoped to soon reach an agreement with Greece. Juncker presented on Wednesday in Brussels Tsipras compromise document of five pages with economic measures, including an increase in VAT and cuts in salaries and pensions of civil servants. Tsipras was not very enthusiastic. But both countries are divided into proposals before Saturday and intend to meet again. However, there were no such meeting. Tsipras rejected the compromise proposal of creditors on Friday in front of the Greek Parliament called it “absurd”. Tsipras determine the proposal as “reckless” and said that Athens can not accept it. It seemed to be completely sure that his provocative message will arrive in Ellmau on Friday Tsipras reached for the phone and called Russian President Vladimir Putin, whose country has been excluded from the summit of G7 because of the crisis in Ukraine.

Late Sunday, the EC president said that Greece’s creditors are not put her with an ultimatum that made the proposal last week. Juncker was speaking ahead of a summit of the G-7 in Germany after Greek Prime Minister Alexis Tsipras said on Friday that proposals to creditors for debt deal for Greece are “unpleasant surprise”. Juncker said that Greece has not yet been submitted to the European institutions proposals for reforms and relations with creditors.

“I expected to receive proposals from the Greek government until Thursday, but they never appeared – either on Thursday or on Friday or Saturday. I hope to see these proposals as soon as possible in order to discuss with Prime Minister Greece during the meeting of the EU-Latin America on 10 June in Brussels”, said Juncker. According to Juncker’s proposal gives clear that there is room for negotiation. He said Tsipras presented the proposal of institutions (European Commission, International Monetary Fund and European Central Bank) as an ultimatum – either that or nothing. In his words, however, is not the case. Meanwhile, the Greek Finance Minister Yanis Varoufakis said his country is determined to reject the latest proposals of the European Union, aiming to avoid a default of the country. “It was an aggressive gesture designed to terrorize the government but without knowing that the Greek government can not be terrorized,” said Yanis Varoufakis. He added that “the document submitted to the Prime Minister, bordered by the insult”. “We need reforms, debt restructuring and investments if we get these three elements together will not sign”, warned the Minister of Finance.

A little later in a posting on his blog the Greek finance minister urged German Chancellor Angela Merkel for “word of hope” as what Germany receives at the end of World War II, to show Greece that Europe is ready to suspend their demands austerity. Yanis Varoufakis compare his blog the situation in Greece with that in postwar Germany, when former US Secretary of State James Byrnes pronounce historic speech in 1946 in Stuttgart speech marks the failure of the policy of punishing Germany, supported by defeated it, countries and offers German people outlook for growth and repair, recalls Yanis Varoufakis.

“Seven years later, my country, Greece, needs such an opportunity”, said Greek Finance Minister. “Bigger savings required by an economy already placed on their knees, thanks to the heaviest dose of economic measures a country in peacetime has ever been forced to endure”, said another Varoufakis.

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