EU anger at Tsipras over Greek crisis

Alexis Tsipras

Greek prime minister Alexis Tsipras was met with anger at a summit of eurozone leaders after it became clear he had no written proposals on how to save his country from financial ruin.

With Greece’s banks just days away from a potential collapse that could drag the country out of the euro, Mr Tsipras had been expected to offer up economic reforms in exchange for loans. Instead, his government said it would only present a plan on Wednesday.

Lithuanian President Dalia Grybauskaite said: “You know, there was a promise for today. Then, they’re promising for tomorrow. For the Greek government it’s every time, ’manana’.”

Mr Tsipras had been buoyed by a triumph in Sunday’s referendum, where an overwhelming majority of Greeks backed his call to reject the reforms that creditors had last proposed.

But that domestic victory did not appear to give him much leverage in talks with foreign creditors, who know Mr Tsipras needs a deal soon to keep his country afloat.

Banks have been shut for seven working days and will not reopen before Thursday, cash withdrawals have been limited for just as long, and daily business throughout the country has come to a near standstill.

It was with some surprise that European leaders learned Mr Tsipras did not yet have a written proposal for new rescue aid.

Dutch prime minister Mark Rutte said: “I’m extremely sombre about this summit. I’m also sombre about the question of whether Greece really wants to come up with proposals, with a solution.”

Greece’s 18 eurozone partners have steadfastly said they want to help Greece stay in the currency, but have just as often complained about Greece dragging its feet during months of negotiations.

Even German chancellor Angela Merkel warned Mr Tsipras he is dancing close to the financial abyss.

“We are no longer talking about weeks but very few days,” she said.

An official from a eurozone nation said that Greece’s failure to bring clear proposals to an earlier meeting of finance ministers caused widespread frustration.

Greek Finance Minister Euclid Tsakalotos
Greek Finance Minister Euclid Tsakalotos

Greek finance minister Euclid Tsakalotos instead made a presentation and discussed key issues.

“Everybody was angry,” said one official.

The eurozone’s top official, Jeroen Dijsselbloem, said he hoped the Greek government would make a written request as soon as Tuesday night or Wednesday morning to tap Europe’s bailout fund.

Once that request is in, the eurozone finance ministers would hold a teleconference to discuss the proposals and decide whether they can give Greece more loans.

One big sticking point in the talks is Greece’s demand that the terms of its bailout loans be made easier.

European officials are split on the issue, with lead eurozone lender Germany still reluctant.

The International Monetary Fund (IMF) last week called for European states to accept longer repayment rates and lower interest rates on their loans to Greece.

Many economists say that Greece’s debt burden, at almost 180% of annual GDP, is unsustainable for a country its size.

Getting a new rescue deal for Greece is urgent and becoming more so by the day. Greek banks are running out of cash even after the government shut them last week and placed limits on how much depositors can withdraw or transfer.

Normal commerce is now impossible in Greece. Small businesses, lacking use of credit cards or money from bank accounts, were left to rely on cash coming from diminishing purchases from customers. But Greeks are holding on tight to what they have. And suppliers are demanding that businesses pay cash up front.

Giorgios Kafkaris, a 77-year-old pensioner, was among Greeks standing in line to withdraw cash at an Athens ATM on Tuesday.

“I came to get the €120, I can’t take more. The good thing is we had sorted things out earlier and we had €200-€300 set aside,” he said.

“I’m waiting for something better for all of us. I believe something better will happen.”

Mr Tsipras’s appointment of Mr Tsakalotos as the new finance minister to lead talks with creditors was interpreted as a sign he may be willing to compromise. Mr Tsakalotos, a 55-year-old economist, replaced Yanis Varoufakis, who constantly clashed with his peers.

The lack of progress on Greece worried stock markets in Europe, where the Stoxx 50 index of top companies was down 2.1% on Tuesday. The euro also fell, while Greece’s stock market remained shut since last week amid the bank closures.

Greece has been granted two bailout programs worth a total of €240bn in loans from other eurozone countries and the International Monetary Fund.

But the spending cuts and tax increases demanded as a condition for the loans have hit growth, causing an economic depression and pushing unemployment to 25%.

The government, meanwhile, has been slower than hoped in making the economy more competitive and selling state assets to raise money.