Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 12
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More on 'Merkel gives Greece 12 days to reach funding deal'
Ryan had the initial news, here: "an accord is needed by the end of May"There is a little more on this around the traps, but this is from the Australian Financial Review (gated): Merkel gives Greece 12 days to reach funding deal
First off, though, h/t and thanks to ThreeCheeseFondue in the comments for the follow-up article
German Chancellor Angela Merkel and French President Francois Hollande gave Greece until the end of May to reach a deal on its aid program
Merkel:
Hollande:
The timeline was echoed by EU President Jean-Claude Juncker ... policymakers begin to coalesce around the end of May as a key date
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Merkel, Hollande Tell Greece to Take Route A to Agreement
Angela Merkel and Francois Hollande told Greece there’s no alternative to dealing with creditors as it seeks to unlock bailout funds, after another round of negotiations failed to break the impasse over aid.
With time running out for a deal to free up the remaining 7.2 billion-euro ($8 billion) tranche of aid, the German chancellor and the French president said the Greek government needs to do more work to flesh out its reform program and satisfy the creditor institutions of the European Commission, the International Monetary Fund and the European Central Bank.
They spoke after discussions with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit in Latvia broke up in the early hours of Friday with an agreement only to keep talking. Whereas Tsipras referred to a solution “soon,” Merkel said there’s “a whole lot to do.”
“We need to have the strongest and most complete agreement possible now to secure and facilitate talks for the next deadlines,” Hollande told reporters in Riga later on Friday. “Therefore Greece must give the most information it can on its reforms. Tsipras is working on that.”
The meeting marked another rejection by Merkel -- backed by Hollande -- of the latest Tsipras attempt to bypass finance ministers and strike a political deal at the level of government leaders, highlighting German insistence that Greece’s budget numbers must add up before aid can be released. Without an agreement, Greece risks a default that would put in question its future in the 19-nation euro region.‘Further Work’
“It was a very friendly, constructive discussion,” the chancellor told reporters as she arrived for the second day of the two-day summit. “But it was very clear that further work has to be done with the three institutions.”
Greek bonds fell, with yields on two-year notes rising 44 basis points to 73 percent at 2:29 p.m. in Athens, reversing earlier gains. Greek shares were little changed, with the benchmark Athens Stock Exchange gaining 0.1 percent.
Tsipras said that he was “optimistic we can soon reach a long-term, sustainable and viable solution without the mistakes of the past -- and Greece will soon come back with cohesion and growth.” He is due to meet later on Friday with EU Commission President Jean-Claude Juncker.
A government official, in a debriefing after the talks broke up about 1 a.m., signaled Greek frustration by saying that a main obstacle is that the International Monetary Fund needs to be on board. “Open issues” remain with creditors, including pensions, sales-tax rates and targets for a primary budget surplus, the official told reporters.
Optimism Quashed
A short statement released separately by the French and German governments after more than two hours of talks with Tsipras was devoid of earlier optimism expressed by Hollande at paving the way for an accord as soon as the end of the month. In its place, the governments of the two biggest euro-area economies talked of agreement “to stay in close contact.”
“Approaching payments to the IMF in the first half of June help focus the mind,” George Pagoulatos, a professor of European politics and economy at the Athens University of Economics and Business, said by phone. “Baseline expectation remains that the two sides will strike an 11th-hour agreement.”
France and Germany offered to provide assistance to Greece and Tsipras whenever questions come up, Merkel said. “But the accord must be reached with the three institutions and very, very intensive work has to be done.”
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Weekend press: Greece narrowly rejects call to stop paying IMF debt, nationalize bank
AP reports over the weekend: "Greece's ruling Syriza party narrowly rejects call to stop paying IMF debt, nationalize banks"
No Funding for Greece Outside ECB Rules: ECB's Nowotny
European Central Bank (ECB) Governing Council member and head of Austria's central bank Ewald Nowotny doesn't see loosening of funding for debt-ridden Greece as an imminent possibility.
"There is always a lot of noise in such a situation and I think the important point is to distinguish the noise from the facts," Nowotny said in an interview for CNBC television on Thursday.
"For us, it is quite clear that we have certain conditions to be met. The one condition is ... whether we can accept for instance Greek assets, Greek bonds, as collateral. The answer is, for the time being: no," the ECB policymaker said, adding that the ECB has to play by rules.
"One has to be quite clear. We do not have a possibility to do some, let's say, financing outside our rules."
"I know there had been some ideas floating around that we might give some kind of interim financing just like that. I don't see any legal possibility for that," he said.
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Greece Creditors Sya No Deal Near
Greece’s creditors said the government must make hard commitments to overhaul its finances or it won’t get a deal to unlock bailout payments.
The Greek administration saw its optimism about a deal rebuffed as European policy makers gathered in the German city of Dresden for a Group of Seven meeting. While Greece isn’t on the formal agenda, it has dominated public comments after the country’s officials claimed an accord can be reached by Sunday.
Bailout talks “are progressing faster but not yet fast enough to conclude,” French Finance Minister Michel Sapin said in an interview with Bloomberg at the G-7. “The red line is that there cannot be a deterioration of the overall budget situation, and in fact there needs to be an improvement.”
Negotiations have stumbled over issues including Greek pensions. With time and patience running out, Greece hasn’t yet said how it will pay almost 1.6 billion euros ($1.74 billion) in International Monetary Fund payments scheduled for next month, with the first transfer due June 5.
European stocks declined for a second day amid investor concern that the payment will be missed. The Stoxx Europe 600 Index was down 0.7 percent at 12:14 p.m. German time, and Greece’s ASE Index dropped 0.6 percent.
The yield on Greek 10-year bonds was at 11.11 percent. The yield has dropped since May 22, with the bonds set for their first weekly gain since the end of April. The yield climbed as high as 13.93 percent last month, the most since 2012.
International creditors need an agreement on an economic plan next week to be able to release funds before Greece’s current loan arrangement expires at the end of June, according to a European Union official who spoke on condition of anonymity.
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Greek Talks With Creditors Deepen as Payment Clock Ticks
Greek officials and creditor institutions are locked in talks for another weekend as both sides work against a payment deadline to avert default and a euro-region exit.
“The key issue is to resolve the situation so that Greece can remain a member of the euro area,” the European Commission’s vice president, Jyrki Katainen, told Finland’s YLE TV1. “Unfortunately over the past six months things have turned for the worse in Greece, purely for political reasons.”
The standoff between Greece’s anti-austerity coalition and creditors over the terms attached to the country’s emergency loans has triggered a liquidity squeeze, tipping the economy into a double-dip recession.
With just four weeks before a euro-area-backed bailout expires, Finance Ministry officials have told Greece there’s not time to get a disbursement approved by the currency bloc’s parliaments unless they reach at least a technical agreement by the beginning of June.
“If the Greek government refuses to engage in the reform process, it is playing with the future of the country,” said Klaus Regling, managing director of the European Stability Mechanism. “The risk is then great that past sacrifices will have been in vain,” the head of the euro area’s crisis-fighting fund told Germany’s Focus magazine.
Optimism Rebuffed
Greek government spokesman Gabriel Sakellaridis said May 28 that a staff-level agreement with bureaucrats from the European Commission, the European Central Bank and International Monetary Fund can be reached by Sunday. The government has expressed similar optimism several times in the past two months only to be rebuffed by creditors asking for concrete actions in areas including pension and labor market reform, sales taxes and the budget.
“The red line is that there cannot be a deterioration of the overall budget situation and in fact there needs to be an improvement,” French Finance Minister Michel Sapin said Friday in an interview. Bailout talks “are progressing faster but not yet fast enough to conclude.”
Greek stocks and bonds rose this week amid optimism a deal is within reach. “There has been real progress and we remain convinced an agreement can be reached soon,” French Prime Minister Manuel Valls told Italy’s la Repubblica. “We’re absolutely not working on the hypothesis of a Greek exit from the euro.”
Failure to reach an agreement that will pave the way for the disbursement of bailout funds risks leaving Europe’s most-indebted state unable to meet payments to its creditors.
Greece will be able to scrape together enough cash to make a payment of about 300 million euros ($329 million) due to the IMF on June 5, Economy Minister George Stathakis said in an interview with the Real News newspaper published Friday.
“The country has been servicing its loans through internal resources for the past year,” Stathakis said. “It will do the same this time.”
Greek Deal Possible This Week: Oettinger
Germany's representative at the European Commission, Guenther Oettinger, said in an interview published on Monday in German newspaper Die Welt that an agreement between Greece and its international creditors could still be reached by the end of this week.
"We will need progress at the working group level, in order that we can agree on a reform agenda, perhaps even by the end of the week, which would trigger the payment of the last tranche of aid from the current aid program, Oettinger told the newspaper."
He also mentioned the upcoming meeting between German Chancellor Angela Merkel, French President Francois Hollande and EU President Jean-Claude Juncker in Berlin scheduled for Monday evening, although he downplayed expectations of a decisive breakthrough.
"Greece's challenges are too big to be solved 'en passant', Commissioner Oettinger said.
Greece's government and its creditors are continuing talks aimed at reaching a deal to unlock the outstanding €7.2 billion from bailout funds, while the cash-strapped country is in danger of running out of money and defaulting on its debts. Athens faces a debt repayment to International Monetary Fund on June 5.
Oettinger said there had been some progress in the talks, especially in taxation issues, but there are still considerable differences in topics such as the labor market and the pension system.
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EUR - Greece: FT says its not a “take it or leave it” ultimatum, but want a quick rea
EUR not doing a real lot as various reports filter outLatest is the FT contradicting DJ reports of a 'take it or leave it' plan
Gotta say, that makes sense. A 'take it or leave it' is really just another stepping stone in the negotiations anyway.
more to come
Juncker-Tsipras: no deal yet but 'progress made'
Still no conclusive deal on Greece but the European Commission just put out a hopeful statement.
After a nearly five-hour meeting between Jean-Claude Juncker, the European Commission president, and Greek Prime Minister Alexis Tsipras, the European Commission said "progress was made in understanding each other's positions."
The commission made it clear no final agreement was reached but added: "It was agreed that they will meet again ... Intense work will continue."
As reported earlier, several EU officials involved in the negotiations have expressed confidence that a deal was within reach, and that Mr Tsipras was prepared to make concessions to secure a desperately needed €7.2bn in bailout aid that is a year overdue.
In brief remarks, Mr Tsipras said that while the two sides were close to an agreement on budget surplus targets, there were still significant differences on pensions. He added that the only "realistic basis" for a deal remained the Greek counter-proposal, but sought to play down chances Athens would miss Friday's €300m payment to the IMF.
"Don't worry about that," Mr Tsipras said.
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EU Parliament president warns Athens of dramatic consequences if talks fail
European Parliament President Martin Schulz urged Greece in a newspaper interview to accept a proposal by its international lenders for a cash-for-reforms deal, warning Athens that failing to reach an agreement would have "dramatic" consequences.
The European Union is willing to compromise with the Greek government, Schulz told German newspaper Welt am Sonntag in an interview published on Sunday, adding that the lenders had already made concessions in the debt negotiations.
"I can only warn the Greek government against turning down the hand held out to them," Schulz, who has been supportive of Greece's cause, said. "Time is running out and the consequences would be dramatic."
Greek Prime Minister Alexis Tsipras has spurned the terms of proposed aid from lenders, creating an impasse that threatens to push Greece into default and out of the euro zone.
Schulz said Tsipras and his Syriza party should come to terms with the fact that they were not only accountable to their voters, but that they also had a responsibility for the country and the European Union.
Greece is in a standoff with its euro zone and International Monetary Fund creditors over an aid package aimed at unlocking money for the country.
The impasse, which is weighing on financial markets and could hit the global economic recovery, will hang over a Group of Seven leaders' summit that Chancellor Angela Merkel will chair in southern Germany from Sunday.
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