Greece has until today to submit fresh proposals to meet creditors austerity demands, while a full EU summit has been scheduled for Sunday to discuss the proposals in a final attempt to reach a mutually acceptable compromise.
This decision came out of the emergency eurozone summit that was held on Tuesday as a result of the “No” vote coming out of the Greek referendum. Greek Prime Minister Tsipras and his Syriza party had campaigned for a no vote in the face of stringent EU conditions for the resumption of emergency lending.
Tsipras addressed the European Parliament in Strasbourg on Wednesday telling the members that his government would continue with economic reform efforts saying, “We have to put on the table an agenda for growth. We must be able to look reality in the face and find solutions. The proposals by the Greek government for funding of its obligations and the restructure of its debt is not designed to provide extra buttons to European taxpayers.”
In a later announcement, the Greek government said that banks and the Athens stock market would remain closed until Monday when the result of the Sunday EU meeting would be known.
Speaking on the BBC Today program, EU Economic Commissioner, Pierre Moscovici said that Europe did not want Greece to fall out of the euro.
“The Commission does not want a Grexit. Grexit would be a terrible failure and we are fighting to avoid it”. He did however add that proposals must first come from the Greek side.
He reiterated, “They know what they have to do, they know what we expect.”
Eurozone leaders did however offer a sweetener to Greece in the form of the possibility of limited short term financing, sufficient to allow the repayment due on 20 July. The offer of an important panacea to PM Tsipras came in the form of the additional possibility of action down the road to relieve the crushing debt burden faced by the Greeks.
Speaking after the Tuesday emergency summit, German Chancellor Angela Merkel said the next move must come from Greece. Chancellor Merkel added, “Of course, at the very end, one will have to discuss how debt sustainability can be created but not by saying first “How do we close the gap?” but rather “What can Greece do”.
She also said that ECB president Mario Draghi had made it clear to the leaders at the summit that Sunday would be “the right moment to make decisions” for Greece to avoid a meltdown of its banking system.
Alexis Tsipras had told the Greek electorate after the referendum decision was announced that this would result in a settlement with the EU within two days. He is now saying that the negotiation process will be fast, “ I believe there will be a solution by the end of the week”.