After 5 months of arduous negotiations Greece has to reach a deal with its creditors before the June 30 deadline to gain access to €7.2bn in bailout aid.
Greece's current bailout ends on June 30 and as talks in Brussels on Sunday collapsed all eyes now turn to Thursday’s meeting of euro zone finance ministers. If a deal is reached by June 18, there may just be enough time for Greece to pass the necessary legislation to get the rescue disbursement and stay in the euro or prepare for a messy divorce.
Also, if there is no agreement by then, the question is whether the European Central Bank would cut off Greek banks. It is more likely that the ECB will not pull the plug on Greek banks immediately. Nevertheless the ECB could raise the haircut, or discount, it applies to Greek government bonds it accepts as collateral for emergency liquidity assistance, the ECB can also block a decision to extend more ELA.
Mario Draghi, the president of the European Central Bank, has warned that time is rapidly running out to resolve the Greek debt crisis, as financial markets took fright at the prospect of a looming default. “While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps,” Draghi said.
French President Francois Hollande urged Greece on Monday to resume negotiations with its creditors in Brussels “as soon as possible,”
"This is a message to Greece. It doesn't have to wait; it must get back to the discussion with the institutions," Mr. Hollande said in a news conference on the sidelines of the Paris Air Show. He said the absence of a deal on Greek debt would lead to "turbulent times."
The European Commission argued that Greece's creditors have made significant concessions in recent talks and that it would only resume mediation efforts if Greece put forward new proposals.
Greek Finance Minister Yanis Varoufakis told German mass-market daily "Bild" Tuesday that he wouldn't bring a list of new reform measures to the upcoming meeting of finance ministers because "the Eurogroup is not the right place to present proposals which haven't been discussed and negotiated on a lower level before."
He added, however, that the Greek negotiation team is "available at any time" to find a comprehensive solution with its partners.
In his interview with "Bild," Varoufakis said officials from the ECB, IMF and the European Commission needed to come back to the negotiation table "with a clear, robust mandate."
Athens now awaits a new proposal by its international lenders for a cash-for-reforms deal. Sources within the government imply that Athens is also willing to concede more ground but would not back down on their non-negotiable “red lines” on labor and pension issues.
“What matters now is not who will make the first move [Greece or its lenders] but to reach a mutually beneficial agreement” a person close to the talks said to iefimerida.gr
SYRIZA’s parliamentary group is due to convene at 1 p.m. Tuesday and Prime Minister Tsipras has to balance efforts to keep his party together, as there's a growing risk of a rift within the radical leftist party, with the simultaneous need to seal a deal.
Before speaking to his lawmakers, Tsipras is due to meet the newly appointed head of PASOK, Fofi Gennimata, To Potami chief Stavros Theodorakis and New Democracy deputy Dora Bakoyannis.