EU pushes Greece for deal as protests erupt
EU Commission chief Jean-Claude Juncker impatiently pushed Greek Prime Minister Alexis Tsipras for a debt deal Thursday after talks with the leaders of Germany and France ended without a breakthrough.
Fresh protests erupted meanwhile in Athens at the prospect of new austerity cuts demanded by Greece\’s international creditors in return for money to stave off default.
Late-night talks in Brussels between Tsipras, Angela Merkel and Francois Hollande Wednesday failed to produce a deal that would unlock the remaining 7.2 billion euros ($8.1 billion) of Greece\’s bailout, which expires at the end of June.
"People are gradually beginning to lose patience. And I\’m only human, so I share their impatience," Juncker told reporters as he arrived for the second day of an EU-Latin American summit.
"We must get the cow off the ice", he said, using a folksy German phrase for solving a difficult problem — and added that "the cow keeps on slipping, we try to push her again today."
European Commission spokesman Margaritis Schinas confirmed Juncker would meet Tsipras at 1200 GMT Thursday, after a "brief encounter" on the summit sidelines on Wednesday "where their personal relationship was reestablished."
Radical leftist leader Tsipras and former Luxembourg premier Juncker fell out at a meeting in Brussels last week, when the Greek PM rejected the EU\’s "absurd" reform proposals.
The Athens stock market however soared by 6.9 percent on the belief that a bailout deal was imminent.
Merkel on Thursday said three-way talks with Tsipras and Hollande had been "very intensive".
"There was absolute consensus that Greece now will work further with emphasis and high intensity with the three institutions in the next days, to clear as far as possible all open questions," she told reporters.
In Athens there was a repeat of the protests that have erupted throughout the five-year debt crisis as Communist trade union protesters occupied the finance ministry in the landmark Syntagma Square.
"We have bled too much, we have paid, stop the new measures," said a huge banner that they draped across the building after taking down the EU flag.
Unions called for further protests later Thursday against a government "that no longer understands the real need of workers," a statement said.
Ratings agency Standard & Poor\’s on Wednesday further cut its junk rating for Greek government bonds after the cash-strapped country delayed a debt payment to the International Monetary Fund last week.
Only a few hours earlier Merkel and Hollande left the EU summit building without comment, but a German government statement said the leaders had agreed the talks "must be intensified".
A European source close to the negotiations said Merkel "acted as someone who is looking for a solution. Everyone is being careful not be the reason for a failure."
Greece\’s creditors, with the strong backing of hardline Germany, have refused to release the last 7.2 billion euros remaining in its EU-IMF bailout unless Athens agrees to tougher reforms.
The bailout expires on June 30 and without the cash Greece will be unable to pay its foreign debts, having already had to ordered local authorities to turn over their cash reserves to help it meet earlier commitments.
A default could send it crashing out of the euro, with the head of the German central bank warning Thursday that the dangers of contagion from a possible Greek insolvency could not be underestimated.
The impact from such a scenario were "certainly better contained than they were in the past, though they should not be underestimated," said Bundesbank chief Jens Weidmann.
"But the main losers in that scenario would be Greece and the Greek people," he insisted.
The Greek premier\’s anti-austerity Syriza party won elections in January with a promise to end to five years of austerity imposed under two international bailouts since 2010.
Leftist-led Athens has strongly rejected many reforms, such as pension reforms and changes to Greece\’s sales tax, but on Thursday officials seemed ready to make concessions on fiscal targets.
"People have to realise that these measures are temporary and target economic recovery," junior minister Georges Katrougalos told the public broadcaster ERT.
Time is now running out for a deal as any agreement must be approved by finance ministers from the 19-country eurozone at a meeting in Luxembourg on June 18, and then voted on by several national parliaments.
Greek officials said they were discussing a possible extension of the bailout until March 2016, which would give more time to work out a long-term solution and ensure Athens does not lose access to the last 7.2 billion euros.
The bailout has already been extended twice, once in December and again in February.