Greek Prime Minister Alexis Tsipras is seeking a “definitive” solution for Greece in a proposal to European Union leaders on the eve of emergency talks that could decide the nation’s future in the euro.
Tsipras briefed German Chancellor Angela Merkel, French President Francois Hollande and EU Commission President Jean-Claude Juncker on Greece’s proposal to unlock bailout funds in phone calls on Sunday, according to an e-mailed statement from the Greek Prime Minister’s office.
No details were provided on the content of the plan and the Greek government spokesman didn’t respond to phone calls and text messages seeking comment. An EU diplomat said the European Commission hasn’t received a new proposal from Greece. The diplomat, who wasn’t authorized to discuss the matter publicly, said that Juncker spoke today with Tsipras, Merkel and IMF Managing Director Christine Lagarde. Representatives of Greece’s creditors would meet at 5 p.m. in Brussels to discuss any new proposal from the country’s government, the diplomat said.
Sunday’s diplomatic flurry comes ahead of a meeting of EU leaders on Monday to resolve an impasse that has brought the cash-strapped country on the brink of default. Months of back and forth between Greece and its creditors have left the country’s banks living day-to-day on European Central Bank funding. Failure to strike an agreement for unlocking emergency loans by June 30, when Greece’s euro area-backed bailout expires, will risk leaving the country unable to service its debt.
Tsipras’ anti-austerity coalition has rejected demands from creditors which would require Greece to slash pensions and hike sales taxes to qualify for an extension in aid. Instead, Tsipras has said that any solution should focus on the country’s unsustainable debt. The proposal today was for “for a mutually beneficial agreement, which will give a definitive solution, and not defer the problem,” according to the statement.
Earlier Sunday, a Greek government official said the plan included elimination of early retirement options as of next year, an increase on tax surcharges that mid and high-income earners pay, as well as a levy on companies with annual net income over 500,000 euros. The official asked not to be named as the plans were not finalized and were subject to approval by the Greek cabinet which met today.
Tsipras plans to travel to Brussels after the cabinet meeting where he discussed Greece’s proposals with his ministers. Euro-area finance ministers will also meet on Monday while the ECB will re-assess emergency funding for Greece’s banks as deposits continue to flee at dizzying rates.
Austrian Finance Minister Hans Joerg Schelling said on ORF Television today that he expects Greek banks will reopen without problems on Monday, adding that Greece needs to implement reforms.
“Timing isn’t on Greece’s side,” even if the government agrees to terms and conditions of a bailout agreement with its creditors, Maltese Finance Minister Edward Scicluna said in a phone interview today. Nobody wants to see a default, which would be very messy and cause huge political fallout, Scicluna said.