Ministers To Discuss Greek Crisis

Ministers To Discuss Greek Crisis

Eurozone ministers will make a fresh attempt to break the deadlock in the Greek debt crisis with time running out for a deal to prevent a potentially catastrophic default by the radical left Syriza government.

Finance ministers from the 19 members of the single currency bloc will gather again in Brussels after supposedly make-or-break talks ended early on Monday because a new plan from Athens arrived too late for proper scrutiny.

Failure to agree a plan to put to a two-day summit of EU leaders in the Belgian capital starting tomorrow could see Greece become the first country to be forced out of the euro, with potentially far-reaching consequences for the entire continent.

It is unclear whether the latest Greek proposal – after months of stalling - for eight billion euro of further austerity measures to reduce the country's debt mountain will be enough to satisfy its creditors.

It was welcomed by European Commission president Jean-Claude Juncker who said he was "convinced" there would be a final deal while French finance minister Michel Sapin said it needed just "one last push".

But the head of the International Monetary Fund (IMF) Christine Lagarde has said it was "still short of everything we expected" while German chancellor Angela Merkel – Europe's key player – warned "there is a lot of work to be done".

The Greek plan involves raising new taxes on businesses and the better off, selective increases in VAT and cutting the pensions bill by restricting early retirement and increasing contributions.

Crucially for Greece's prime minister Alexis Tsipras, there would be no further cuts to pensions or public sector pay – "red line" issues for Syriza.

Even if there is a deal in Brussels – giving Greece access to a new 7.2 billion euro tranche of bailout funds - it may still not be enough to avert a collapse.

Without the additional funding, Athens will be unable to make a 1.6 billion euro repayment to the IMF due on Tuesday. If it fails to meet the deadline it will be declared in default, pushing it towards the exit door from the single currency.

But before the money is released it has to be approved by the Greek parliament – where Mr Tsipras is facing a possible revolt from hardliners from the Syriza left opposed to any further austerity – and the other eurozone governments.

To add to the pressure, German officials have reportedly said that they will not put any deal to the Bundestag until it has been accepted by the parliament in Athens.

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