28th June 2015
The European Commission has published the last set of proposals agreed by the Troika of creditors and offered to Greece late last week saying that it could have led to a comprehensive agreement before the Greek government walked away from the negotiations.
The Commission says it would have addressed future financial stability needs including a jobs programme but was rejected by the Greek Government. The Greek Prime Minister Alex Tsipras had asked for an extension of financial help until a referendum can be held on Thursday. But this was rejected by EU finance ministers late on Saturday.
The European Central Bank says it will not provide additional aid beyond the £63bn already promised to Greek banks which may result in them being closed banks early in the week with a likely imposition of capital controls.
In a statement on its website, the EC writes: “In the interest of transparency and for the information of the Greek people, the European Commission is publishing the latest proposals agreed among the three institutions (European Commission, European Central Bank and International Monetary Fund), which take into account the proposals of the Greek authorities of 8, 14, 22 and 25 June 2015 as well as the talks at political and technical level throughout the week.
“Discussions on this text were ongoing with the Greek authorities on Friday night in view of the Eurogroup of 27 June 2015. The understanding of all parties involved was that this Eurogroup meeting should achieve a comprehensive deal for Greece, one that would have included not just the measures to be jointly agreed, but would also have addressed future financing needs and the sustainability of the Greek debt. It also included support for a Commission-led package for a new start for jobs and growth in Greece, boosting recovery of and investment in the real economy, which was discussed and endorsed by the College of Commissioners on Wednesday 24 June 2015.
“However, neither this latest version of the document, nor an outline of a comprehensive deal could be formally finalised and presented to the Eurogroup due to the unilateral decision of the Greek authorities to abandon the process on the evening of 26 June 2015”.
The statement says: “Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday (26 June 2015)”.
The ECB says that it is prepared to review the decision on its Emergency Liquidity Assistance (ELA) depending on developments and would work closely with the Bank of Greece.
The current ceiling for ELA, agreed on Friday, is €89bn (£63bn). It is not clear if all that money has been disbursed.
The ECB statement quotes Bank of Greece Governor Yannis Stournaras saying: “The Bank of Greece, as a member of the eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
The statement comes after eurozone finance minsters on Saturday refused a Greek request to extend Greece’s current bailout.
The bailout expires on Tuesday, the same day that Greece has to make a payment of €1.5bn (£1.1bn) to the International Monetary Fund (IMF) that it risks defaulting on.
Greek Finance Minister Yanis Varoufakis published the following statement on Friday. He says: “The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals — proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt.
“I was even asked: “How do you expect common people to understand such complex issues?” Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps.”