Greeks Hand Finance Ministers Revised Plan to Stave Off Default

Updated on
Still No Deal For Greece After Long Night of Talks

The Greek government on Thursday handed over a revised proposal to stave off a default as euro-area finance ministers prepared to reconvene in Brussels.

Finance chiefs must now study the new proposal that just arrived to see if it meets the terms laid out by creditors, Austrian Finance Minister Hans Joerg Schelling told reporters ahead of the meeting.

The talks shifted to finance ministers after Greek Prime Minister Alexis Tsipras wrapped up an emergency session with the heads of his country’s three creditor institutions. Tsipras is struggling to break a five-month impasse as the country’s bailout is set to expire next Tuesday.

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The European Central Bank on Thursday left the ceiling for the emergency liquidity assistance it’s providing Greek banks unchanged, said two people familiar with the matter, who asked not to be identified because the talks are private. An ECB spokesman declined to comment. The ECB is currently deciding on a daily basis whether to provide more liquidity to lenders.

Dueling proposals and rejections have left Greece without a deal to unlock aid, raising doubts it can meet a payment of 1.5 billion euros ($1.7 billion) to the IMF that falls due the same day the bailout ends. Sticking points include pensions, sales tax increases and debt relief.

“Negotiations are in an extremely critical situation,” said Karsten Junius, chief economist at Bank J Safra Sarasin Ltd. in Zurich and a former IMF employee. “Both sides have displayed a certain political will to come to an agreement, but too many technical details still need to be fixed. Greece is now paying the price for its stubborn opposition to a serious discussion both on a political and technical level.”

Nonstop Talks

As the pressure grew, Tsipras met with International Monetary Fund chief Christine Lagarde, European Central Bank President Mario Draghi and European Commission President Jean-Claude Juncker after concluding hours of discussions Wednesday that yielded no breakthrough. Euro-area finance chiefs are also in Brussels trying to find a way to broker an agreement that will satisfy all sides ahead of a two-day summit of European Union leaders that begins later Thursday.

The benchmark Athens Stock Exchange Index on Thursday reversed earlier losses to gain 1 percent at 1 p.m. in Athens after falling 1.8 percent on Wednesday. The index is still up 14.8 percent this week after rallying on hopes of a deal earlier. Government bonds were mixed with the yield on the two-year bond falling 11 basis points to 22.3 percent.

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