Greek crisis: eurozone leaders hold emergency summit – as it …
Good morning.
Hope you all had a relaxing weekend, because today should be as dramatic as anything we’ve seen since the eurozone crisis began over five years ago.
In the coming hours, the most powerful politicians and officials in Europe will hold a series of emergency meetings that will, most likely, determine the future of both Greece and the wider eurozone.
This really could be the last possible chance to reach a deal to avert Greece defaulting, possible exiting the eurozone, and potentially giving the financial markets and the world economy a seismic jolt.
The goal? Hammering out an agreement to finally unlock bailout funds for Greece, which have been locked away for months as its government has tussled with the eurozone.
That deadlock was broken late last night, when the Greek government submitted new proposals to the heads of the International Monetary Fund, the European Central Bank, and the European Commission.
Eine Zangengeburt means forceps delivery, by the way…..
Those proposals will be scrutinised this morning, when Greece’s prime minister, Alexis Tsipras, meets IMF chief Christine Lagarde, ECB president Mario Draghi, EC president Jean-Claude Juncker, and Eurogroup president Jeroen Dijsselbloem (chair of the eurozone finance ministers).
That will be followed by a eurogroup meeting (where details of a deal could be thrashed out), and then an EU leaders summit tonight.
So, what might the deal be?
Greece’s creditors are prepared to sign up for a short-term deal to extend the existing bailout by another six months, injecting up to €18bn of loans into the cash-starved Greek economy. They could also make some kind of pledge about debt restructuring, as part of a third bailout.
As my colleague Ian Traynor wrote last night:
Brussels sources also signalled moves to address Tsipras’s key demand – that the creditors need to offer debt relief to Greece.
Some form of debt restructuring would be promised to Athens in the future, but it would come with strings attached and not as part of the current bailout package, they said.
Related: Greek debt crisis: Tsipras concessions welcomed as ‘good basis for progress’
That package expires in just nine days time; so failure today could trigger the slide towards capital controls, given Greece owes €1.6bn to the IMF on 30 June as well.
But Greece will need to persuade its creditors that it is now offering the ‘credible, concrete’ proposals demanded for months. That means accepting tougher budget surplus targets, savings on pensions, VAT rates and labour market reforms – areas where progress have been stymied for months.
But there’s nothing like a finally-final deadline to get things moving. And there was frenzied activity over the weekend, with world leaders holding phone calls and Alexis Tsipras convening a cabinet meeting to discuss strategy.
Greece’s Finance Minister Yanis Varoufakis leaving the Greek Prime Minister’s office on Sunday after a cabinet meeting. Photograph: Yorgos Karahalis/AP
Negotiators in Brussels worked late into the night too — waiting for that crucial breakthrough
And there were anti-austerity, pro-government protests in Athens last night too:
Protesters put up a banner saying “No to Euro” in front of the parliament building on Sunday evening. Photograph: Milos Bicanski/Getty Images
But will Greece’s banks cope?
Greek bankers are bracing for a difficult day. Although a bank run has been avoided, deposits have been exiting the system at a worrying levels.
According to Reuters, around €1bn of orders have already been placed over the weekend to be carried out today, on top of €4.2bn withdrawn last week.
But the news that Greece has submitted new proposals might ensure relative calm in Greece.
We’ll be tracking all the developments as usual, with correspondents in Brussels and Athens covering what should be a dramatic day.
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Greek crisis: eurozone leaders hold emergency summit – as it …
