EU warns Greece to stop ‘gambling’ and reach debt deal

June 11, 2015
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Greek Prime Minister Alexis Tsipras held talks with fellow European leaders at the European Union headquarters in Brussels, on June 10, 2015/AFP
Greek Prime Minister Alexis Tsipras held talks with fellow European leaders at the European Union headquarters in Brussels, on June 10, 2015/AFP

, BRUSSLES, June 11- The EU’s top leaders warned Greek Prime Minister Alexis Tsipras Thursday to stop “gambling” and reach a desperately needed debt deal to prevent a default and crashing out of the euro.

Donald Tusk and Jean Claude Juncker, the European Union’s most senior officials, pushed Tsipras after talks between the radical leftist Greek premier and the leaders of France and Germany broke up without agreement.

Fresh protests erupted meanwhile in Athens at the prospect of new austerity cuts demanded by Greece’s international creditors in return for money to stave off default when the Greek bailout expires at the end of the month.

“For me it is very obvious that we need decisions not negotiations now, and it’s my opinion that the Greek government has to be a little bit more realistic,” Tusk told a press conference at a EU Latin America summit in Brussels.

A meeting of eurozone finance ministers in Luxembourg next Thursday would be “really crucial” and “decisive” on reaching a deal to end a five month standoff between Greece and its creditors, Tusk added.

“There is no more time for gambling. The day is coming, I am afraid, that someone says the game is over,” said the former Polish premier, who has played a low key role in the Greek crisis.

Leftist leader Tsipras has been playing a high stakes game warning Europe that abandoning Greece would bring “catastrophe” to the 19 member eurozone.

The Athens stock market soared by 7.3 percent on the belief that a bailout deal was imminent, with European stocks also on the rise.

 

– ‘Losing patience’ –

 

European Commission chief Juncker — who held fresh talks with Tsipras on the sidelines of the summit on Thursday following a disastrous meeting a week earlier — said he was growing impatient with Greece.

“People are gradually beginning to lose patience. And I’m only human, so I share their impatience,” Juncker told reporters.

“We must get the cow off the ice,” he said, using a folksy German phrase for solving a difficult problem — and added that “the cow keeps on slipping, we try to push her again today.”

Greece’s creditors are demanding tough reforms to unlock the remaining 7.2 billion euros ($8.1 billion) of Greece’s 240 billion euro bailout, which expires at the end of June.

But the Greek premier’s hard left Syriza party, which won elections in January with a promise to end five years of austerity imposed under two international bailouts since 2010, has refused to back down.

In Athens there was a repeat of the protests that have erupted throughout the five-year debt crisis as Communist trade union protesters occupied the finance ministry in the landmark Syntagma Square.

“We have bled too much, we have paid, stop the new measures,” said a huge banner that they draped across the building after taking down the EU flag.

Unions called for further protests later Thursday against a government “that no longer understands the real need of workers,” a statement said.

Greece’s public broadcaster ERT meanwhile came back on the air on Thursday, exactly two years after it was shut down by the previous government, which had accused it of being wasteful and mismanaged.

 

– ‘Intensified efforts’ –

 

Late-night talks on Wednesday between Tsipras, German Chancellor Angela Merkel and French President Francois Hollande produced no deal but all sides said they had agreed to “intensify” efforts in the coming days.

“There was absolute consensus that Greece now will work further with emphasis and high intensity with the three (lender) institutions in the next days, to clear as far as possible all open questions,” Merkel told reporters on Thursday.

But the situation remains dire for Greece, with ratings agency Standard & Poor’s on Wednesday further cutting its junk rating for Greek government bonds after it delayed a debt payment to the International Monetary Fund last week.

Without the remaining bailout cash Greece will be unable to pay its foreign debts, having already had to orde local Greek authorities to turn over their cash reserves to help it meet earlier commitments.

The head of the German central bank warned Thursday that the dangers of contagion from a possible Greek insolvency could not be underestimated.

The consequences of such a scenario were “certainly better contained than they were in the past, though they should not be underestimated,” said Bundesbank chief Jens Weidmann.

Athens has strongly rejected many reforms, such as changes to pensions and Greece’s sales tax, but on Thursday officials seemed ready to make concessions.

“People have to realise that these measures are temporary and target economic recovery,” junior minister Georges Katrougalos told ERT.

Greek officials also said they were discussing a possible extension of the bailout until March 2016, which would give more time to work out a long term solution.

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