In debt crisis, no new proposals from Greece | News | DW | 07.07.2015
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In debt crisis, no new proposals from Greece

Eurozone finance ministers had made one point clear before their meeting: They wanted to see new proposals. Greece has failed to put any on the table thus far, but is expected to do so shortly.

Greek finance minister Euclid Tsakalotos

A new finance minister for Greece, but no new proposals

As a summit of eurozone heads of state and government gets underway on Tuesday evening, it is unclear what - if anything - they can decide on.

"[Greek Prime Minister] Alexis Tsipras will hopefully tell us where things should go from here, and then we'll see," said EU-Commission President Jean-Claude Juncker.

Minutes before Juncker spoke to the press in Brussels, eurozone finance ministers had finished their meeting, in which Greece had not put any new proposals on the table.

It had been widely expected that the Greek finance minister would deliver a request to receive financial assistance under the European Stability Mechanism, or ESM.

But Jeroen Dijsselbloem, the president of the Eurogroup, said he expected a letter from Greece requesting ESM support by "hopefully [Wednesday] morning." Then, he said, there would be a Eurogroup finance call to "formally start the process of dealing with this request."

First, Dijsselbloem explained, the so-called institutions would have to assess Greece's financial situation, after which point it would be determined whether formal negotiations could begin.

"All of this has to be done in a matter of days," he stressed.

Greece could be bankrupt within days

Following the expiration of a second bailout program for Greece on June 30, Greece has found itself without financial assistance for the first time since the crisis started in May 2010, and is facing bankruptcy. A bank holiday has been imposed, as well as capital controls limiting cash withdrawals of Greek banking card holders to 60 euros ($65) per day.

Greece defaulted on an IMF loan of roughly 1.6 billion euros last week, the first industrialized country to do so.

It has been the ECB that has been providing a lifeline to Greek banks with its so-called emergency liquidity assistance, or ELA. But since the Greek prime minister had announced holding a referendum on the creditors' reform proposals, the ECB has not further increased this emergency cash, deciding - again on Monday night - to maintain it at its current level of 89 billion euros.

The ECB is scheduled to discuss emergency liquidity assistance again on Wednesday.

Views diverge on how long Greece could avoid bankruptcy should the ECB not increase its emergency cash. But July 20, when Athens must to pay back an ECB loan, is widely seen as the day by which Greece needs to have received financial assistance.

Finlands finance minister Alexander Stubb

Finland's Alexander Stubb sees the eurozone coming to the "end of the road"

"The ultimate deadline is probably the 20th of July and I think everyone is aware of that," Finland's finance minister, Alexander Stubb, told Deutsche Welle.

Merkel unnerved

Arriving for the summit of eurozone heads of state and government, Chancellor Angela Merkel seemed unnerved.

"Following the expiration of the second bailout program and the very clear 'no' vote in the referendum, we still have no basis for starting negotiations for assistance within the ESM," Merkel said.

Her colleague from Malta, Prime Minister Joseph Muscat, also expressed skepticism as to what a summit lacking specific proposals from Greece could achieve.

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