Brussels : Divided Eurozone leaders clashed over the fate of Greece on Sunday with a catastrophic exit from the single currency looming large as they struggled to reach a bailout deal with debt-hit Athens. Germany’s fiscal hawks faced off against doves led by France at a summit of the 19 Eurozone leaders in Brussels, with Athens facing demands to push through new reform laws next week.
Without a deal, there are fears that Greek banks could collapse within days, and the country, whose government is without any money, forced to “exit” out of Eurozone.
Greece’s leftist Prime Minister Alexis Tsipras insisted a deal was possible tonight “if all parties want it”, adding that he was ready for an “honest compromise”.But German Chancellor Angela Merkel took a tough line as usual. “There will be no agreement at any price,” Merkel told reporters, complaining of a loss of trust in Athens and warning of “tough negotiations” ahead.
French President Francois Hollande, whose country has been the most supportive of Athens during the six-month standoff, meanwhile said Paris would do “everything” to keep Greece in the euro. In a sign of the growing tensions between the Eurozone’s two biggest economies and political forces, Hollande also ruled out a German proposal for a “temporary Greece exit” from the single currency.
According to the New York Times, the failure of the finance ministers to find a path forward when they met for nine hours on Saturday and reconvened Sunday morning indicated that any agreement to continue negotiations with Athens would be a largely political decision based on the goal of European unity, rather than an economic one.
The European Central Bank is for the time being providing emergency liquidity to keep Greek banks running, but has frozen the limit. The third proposed bailout for Greece is worth over 80 billion euros ($89 billion).
Fresh proposals, submitted by Tsipras, including pension cuts and tax increases that had been rejected by Greeks in a referendum last week, were approved by Parliament on Saturday.
