Greece

After the overwhelming No vote, the focus today is back on Greece’s negotiations with Brussels, culminating in Alexis Tsipras’s government being given a final chance by eurozone leaders to present new reform proposals this evening.

The meetings will also mark the introduction of new Greek finance minister Euclid Tsakalotos, an Oxford-educated Marxist, who replaced Yanis Varoufakis after he was asked to step down in a conciliatory move by Mr Tsipras.

Elsewhere, eyes will be focused on Greek banks, which remain closed for the next two days. The ECB may also have to ask eurozone leaders to guarantee Greek government debt for use as collateral to maintain its liquidity lifeline.

 

By Gideon Rachman
Greece’s No vote was greeted with euphoria in Athens’s Syntagma Square: the fountains were bathed in red light, the flags waved, the crowds sang patriotic songs. Alexis Tsipras, the prime minister, had said the vote was about national pride and his message had struck home. One young woman, a freelance journalist, confided: “I actually voted Yes. But part of me is glad Greece said No. We are a small country, but we have a big history. This is about our dignity.”

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After delivering a decisive No vote in Sunday’s referendum, in which voters backed Athens’ call to reject a compromise with international creditors, Greece is facing the prospect of even greater turmoil as it tries to tries to prevent the collapse of a financial system that is rapidly running out of cash.

Prime minister Alexis Tsipiras has said he is ready to resume talks immediately, while politicians and officials in the rest of the eurozone are holding a series of meetings to decide what to do next.

Key developments so far:

● Greek PM Tsipras will present fresh bailout proposals at the EU summit on Tuesday
● Greek finance minister Yanis Varoufakis quits and is replaced by Euclid Tsakalotos, previously the coordinator of negotiations with Greece’s lenders
● Markets remain relatively unruffled after No vote
● ECB governing council increases the haircut on the collateral posted by Greek banks in exchange for emergency liquidity

 

  • Angela Merkel is taking her revenge on Greek prime minister Alexis Tsipras by insisting there can be no more talks on the country’s debt crisis until after its referendum on the bailout on Sunday
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By Gideon Rachman
The shuttered banks of Greece represent a profound failure for the EU. The current crisis is not just a reflection of the failings of the modern Greek state, it is also about the failure of a European dream of unity, peace and prosperity.

Global equities, the euro and German Bund yields are all sharply lower as markets react to the imposition of capital controls in Greece. Greek banks are closed this morning, triggering long queues at ATMs.

 

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After another day of negotiations the Greek government has failed to reach an agreement with its bailout monitors – the International Monetary Fund, the European Commission and the European Central Bank – on Athens’ reform plans.

Eurozone finance ministers are going to meet again on Saturday to try and broker a deal before the Greeks’ June 30 deadline to repay €1.5bn to the IMF.

 

Greek Prime Minister Alexis Tsipras flew to Brussels on Wednesday morning to try to salvage a bailout deal amid increasing signs of unease among his nation’s creditors over the compromise offer he presented on Monday. Eurozone finance ministers held a meeting on Wednesday evening but without an agreement in place after a day of tense negotiations, it was expected that talks would have to continue on Thursday, the first day of a planned EU summit of national leaders.

By John Aglionby, Ferdinando Giugliano and Mark Odell

 

By Gideon Rachman
As EU leaders head into this week’s emergency talks , they face a choice of three hazardous routes out of the Greek crisis. Route one involves making concessions to Greece. Route two involves standing firm and allowing Greece to leave the euro. Route three involves Athens largely accepting the demands of its creditors.

Eurozone leaders are scheduled to hold an emergency summit on Monday evening to try to reach a last-ditch deal with Greece on a new bailout and to prevent it from defaulting on debts that are due at the end of next week. Athens submitted new reform proposals overnight but eurozone finance ministers said after a meeting there would not be a deal today. Markets, which rallied early on Monday on the cautious optimism, remain upbeat despite the politicians delaying the deadline.

By John Aglionby, Ferdinando Giugliano and Mark Odell

 

By Gideon Rachman
When the radical left won power in Greece in January much was made of the fact that Yanis Varoufakis, the new finance minister, is an academic economist. Many expected that Greece’s negotiating strategy would display a new subtlety and brilliance, now that it was guided by the co-author of Game Theory — A Critical Introduction.

Greek bailout negotiators have come up with a set of revenue-raising projections for 2015 and 2016 that troubles even the most optimistic Athens economist.

The leaked eight-page proposal published by Kathimerini includes administrative measures aimed at raising €1.6bn in the second half of this year and €2.3bn next year and include the following measures: Read more

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By Gideon Rachman
Neither man would appreciate the comparison, but Alexis Tsipras and David Cameron are in remarkably similar situations.

Welcome to our live coverage of the European Central Bank President Mario Draghi’s press conference.

While we are not expecting quite the same excitement as six weeks ago when a protester jumped out from the journalists’ seating area yelling “end the dictatorship”, the eurozone economy is looking perkier, so many investors will be listening out for whether Mr Draghi strays into dovish or hawkish territory with his comments. The ECB kept its benchmark interest rate on hold at 0.05 per cent.

There will also be the inevitable focus on Greece, as bailout talks with creditors reach knife edge. Cash-strapped Athens is threatening to delay making a €305m loan repayment to the International Monetary Fund if there is no deal in the next few days.

By Ralph Atkins and Lindsay Whipp

 

Christine Lagarde made headlines on Friday saying in a German press interview that Grexit was “a potential.”

Coming from the head of the International Monetary Fund, her words rightly caused a stir – even if they were little more than a statement of the obvious. Those charged with maintaining financial stability are not supposed to rock the boat, even if the water is already coming over the gunwales. Read more

Greece on the brink
Greece is said to be about to run out of money and yet there’s no sign of a deal with its creditors. Gideon Rachman is joined by Martin Sandbu and Kerin Hope to discuss whether a further crisis can be avoided.

By Gideon Rachman
The relationship between the government of Greece and the rest of the eurozone increasingly resembles a bad marriage. The two sides are sick of the sight of each other. Mutual trust has broken down. Efforts to patch things up continue, but nothing seems to work.