German Chancellor Angela Merkel demanded urgent action from the Greek government to cement its position as a member of the single currency.
Merkel said that fellow Group of Seven leaders meeting at Schloss Elmau, southern Germany, shared her goal of keeping Greece in the currency bloc and also backed her insistence that Prime Minister Alexis Tsipras must deliver an economic program that can satisfy the country’s creditors.
“There isn’t much time left, that’s the problem,” Merkel said at a press conference on Monday following the meeting. “Every day counts now.”
Creditors are growing increasingly exasperated with Tsipras’s negotiating tactics after he rejected the terms of an aid package last week that could prevent Greece being forced out of the euro. Tsipras’s government last week used a technicality to postpone a payment of about 300 million euros ($336 million) to the International Monetary Fund, and European Commission President Jean-Claude Juncker said the Greek leader had misrepresented the creditors’ position in the talks.
The Greek stock market fell 2.7 percent to reach its lowest level since April. The Athens stock market’s benchmark index has lost 26 percent in the past six months. Greece’s 10-year bond yields rose for a third day to 11.42 percent.
‘Not the Message’
In a speech to lawmakers on Friday, Tsipras decried the “clearly unrealistic” demands being made of Greece and said he hoped the latest offer from creditors to unlock bailout funds was “a bad negotiating trick.”
“He was presenting the offer of the three institutions as a leave-or-take offer. That was not the case,” said Juncker. “That was not the message given to him.”
A solution to the negotiations should be reached before June 14 but further high-level meetings will only happen if there is a chance of a deal, a French government official told reporters on the condition of anonymity. Greek Minister of State Nikos Pappas and Deputy Foreign Minister Euclid Tsakalotos are meeting European Union Economic Affairs Commissioner Pierre Moscovici in Brussels on Monday, a Greek government official said.
“A faster resolution is in Greece’s interest,” French President Francois Hollande told reporters after the meeting. “If we want to move forward, it would be necessary to have technical talks, in the hours and the days to come, so that the proposals that aren’t working for the Greeks are replaced by alternative proposals.”
With talks between the Greek government and creditors resuming in Brussels on Monday, the G-7 leaders are leaning on Tsipras to do a deal and avert the risk of wider economic reverberations. U.S. President Barack Obama put concerns over the deadlock onto the summit agenda while Canadian Prime Minister Stephen Harper emphasized the importance reaching a settlement.
“What it’s going to require is Greece being serious about making some important reforms, not only to satisfy creditors but, more importantly, to create a platform whereby the Greek economy can start growing again and prosper,” Obama said at a press conference after the meeting. “If both sides are showing sufficient flexibility, then I think we can get this problem resolved. But it will require some tough decisions for all involved.”
Underscoring the pressure on Greece to commit to reforms undertaken elsewhere, Italian Prime Minister Matteo Renzi said it was “unthinkable” that Italians should help pay for a Greek pensions system more generous than their own.
“All of us who were at the table want Greece to stay in the euro area,” Merkel said after hosting the summit of G-7 leaders also attended by Juncker and IMF chief Christine Lagarde. “Let there be no doubt about what we always say -- that making an effort of your own and receiving solidarity is the right combination and two sides of the same coin.”
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