Plan? What Plan? Greece Shows Up Without Proposals

European leaders start to wonder if Greece actually wants to stay in the eurozone anymore.

Prime Minister Charles Michel of Belgium in seen in Brussels, June 29
Prime Minister Charles Michel of Belgium in seen in Brussels, June 29 (Kanselarij van de Eerste Minister)

European leaders on Tuesday publicly questioned Greece’s willingness to stay in the euro after its new finance minister showed up in Brussels without a fresh proposal for deal.

Belgium’s prime minister, Charles Michel, said it was becoming “harder and harder” to make sense of his Greek counterpart’s negotiating strategy.

On the one hand he says, “We want to stay in the eurozone.” On the other hand, he’s not taking any initiative, zero, nothing, to stay in the eurozone.

Alexis Tsipras, the Greek prime minister, promised voters this weekend he could do a deal with other European countries for continued financial support within “48 hours” of a referendum he had called on the creditors’ latest proposal.

More than 60 percent of Greeks voted “no” in the referendum on Sunday, exhausted by five years of austerity that has left one in four workers unemployed.

But in many other countries, the vote was seen as a rejection of the rules that underpin the single currency.

Sigmar Gabriel, the German economy minister, said the referendum’s outcome meant “negotiations about a program worth billions are barely conceivable” anymore.

Gabriel and other European officials had warned they would interpret a “no” as a vote against the euro.

Without another bailout from European countries that earlier lent Greece €240 billion, it would be unable to pay back €3.5 billion to the European Central Bank later this month, likely triggering a de facto ejection from the currency union.

Yet Greece’s Euclid Tsakalotos, who replaced the erratic Yanis Varoufakis as finance minister a day earlier, turned up without written proposals to a meeting in Brussels on Tuesday. Instead, he verbally reiterated the plan Greece submitted to its creditors before the referendum — a plan that was rejected at the time.

Tsipras, who came to power in January on promises to end austerity, betted that a “no” vote in the referendum would strengthen his negotiating position in Brussels, officials’ denials to the contrary.

“Our message is not a message of breaking with Europe but for negotiations for a viable agreement,” he said on Sunday night.

But Tsipras’ antics have exhausted his creditors’ patience.

After he reneged on some of the terms of Greece’s bailout by canceling privatizations, the far-left leader proposed policies, such as raising the minimum wage and rehiring public workers, that would do undo what was seen in the rest of Europe as precious progress toward a more competitive Greek economy.

In negotiations for an extension of the bailout, Tsipras and Varoufakis turned down a compromise proposal from the creditors that would have allowed Greece to keep sales taxes lower than originally envisaged and stave off painful pension cuts. Instead of more cuts and reforms, they advocated higher social spending and deeper state involvement in the economy.

Greece’s creditors, primarily Germany and other Northern European countries, believe its tendency to borrow and overspend and the absence of a strong private economy is what got the country

After the meeting of finance ministers broke up without an agreement and leaders arrived in Brussels for an emergency summit of their own, the Netherlands’ Mark Rutte told reporters he was “very pessimistic” about the prospects of a last-minute deal to keep Greece in the single currency union.

So did Finland’s Juha Sipilä who added, “We are waiting for [a] credible proposal from Greece tonight. And it has to come tonight.”

Germany’s Angela Merkel, who leads the bloc’s largest and most powerful member state, warned there were only days left to find a way out of the impasse.

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