Public Affairs Networking
08/07 – New proposals by Athens are expected today; Brussels has a detailed plan for a Grexit scenario

The press continues to react to Sunday’s Greek referendum, Brussels and European leaders’ expectations as well as on the possibility of a Grexit. Les Echos reports that European leaders decided to extend talks with Greece, mostly because nobody wants to “be the one who will have pushed Greece out of the euro area”. Euro area leaders agreed to discuss a possible third bailout plan provided Athens makes concrete reform proposals. “Debt restructuring has been discussed,” Irish Finance Minister Michael Noonan said.

The French economic newspaper adds that France and the European Commission are pushing for a quick solution allowing Greece to honour its financial commitments this summer, possibly by releasing funds in the form of a bridging loan. Several newspapers, including El Mundo and FAZ, say that, in Brussels, preparations for the social consequences of a Grexit are made, including humanitarian aid.

The EC further examines how the EU can provide money from EU funds. Along the same lines, European Council President Tusk made it clear that the situation is critical and that a Grexit cannot be excluded, says Jornal de Negocios. The Daily Telegraph says that US President Barack Obama has been forced to intervene in Greek debt negotiations, after European leaders openly threatened Athens with an imminent euro area exit during emergency talks. The US President spoke to Greek PM Alexis Tsipras and German Chancellor Angela Merkel last night. The UK newspaper adds that ECB governing board member Ilmars Rimsevics admitted preparations were being made for a Grexit.

Several newspapers, including Kathimerini, De Telegraaf and The INYT, note that the new Greek Finance Minister appeared for an emergency meeting in Brussels without a specific new proposal, leaving European finance ministers aghast. It is further reported, in Russia’s Vedomosti, La Libre Belgique and on for instance, that Greece will present a revised reform plan to its creditors today and will also request aid from the European Stability Mechanism, as said Eurogroup President Jeroen Dijsselbloem. Media outlets are also still mentioning the points of view of Commissioners and EC President Juncker, who spoke yesterday at the plenary session of the European Parliament.

An article of reports that the EC President stated that “Europe is a permanent struggle for compromises” and took offence that Alexis Tsipras cancelled the negotiations early before the referendum. He called on Mr Tsipras to explain to him what the Greek population actually voted on as he had been told that it was not a “No” to Europe and the euro area. NPR features an interview with EC Vice-President Valdis Dombrovskis about Greece’s ‘No’ vote on the bailout referendum. He said Greece’s first objective should be “to regain financial stability. Because without financial stability, there is no economic growth… if you restore financial stability, banks start lending to the economy, citizens start spending, companies start investing. It’s something we saw in other programme countries, like in Ireland, like in Portugal,” he further stressed.

Ecofin Commissioner Moscovici rightly pointed out what is really at stake: the failure of negotiations would be a defeat for all sides, reports a NDR programme. In an interview with Deutschlandfunk, Commissioner Oettinger underlined that he is opposed to a debt cut, as this would “achieve nothing.” He reiterated, though, that “we do not want an exit” from the euro area, and concluded that “Athens must be an honest partner” in the negotiations.

Ta Nea notes that EC President Juncker seems to have reproached harshly Commissioner Oettinger and EC Vice-President Ansip with having spoken of a Grexit. Allegedly, Mr Juncker stressed that no Commissioner should make any more statement about a Grexit, adding that the EC is the guardian of the unity of Europe. A tonne of critics, both on Greece and the EU, and concerns are expressed.

In an interview with L’Express, former French President Valéry Giscard d’Estaing criticises the political activism of EC President Jean-Claude Juncker, saying that the EC should make proposals to advance the European project: it “has the monopoly of initiative, but does not have the power of direct management of economic policy!” In De Morgen, MEP Guy Verhofstadt states the Greek crisis is a shared responsibility. The European Commission, the IMF and the ECB have slowly but surely suffocated the Greek economy. The only way out is an entirely new and comprehensive approach, stresses Mr Verhofstadt.

In his column in Les Echos, Dominique Moïsi explains why Europe should help Greece despite its overt defiance of the EU, as evidenced once again by Sunday’s referendum. According to Mr Moïsi, for Europe, helping Greece is helping itself, because the future of the EU is hanging in the balance. According to Italian Prime Minister Matteo Renzi, the Greek referendum did not improve the negotiations’ atmosphere and now, consequently, Alexis Tsipras must do his part by bringing in solid and credible reforms, Il Corriere della Sera notes.

In an opinion piece in Libération, Director of Jacques Delors Institute Yves Bertoncini discusses the questions raised by the “No” vote in Sunday’s referendum in Greece. Mr Bertoncini wonders, among other things, how Greece’s partners will behave. He calls on EU leaders to adopt a demanding and constructive approach and to take far-sighted and magnanimous decisions. “Greece alone cannot save itself,” reads an opinion piece in The INYT. Most media outlets feature opinions being not in favour of a Grexit.

Claude Karger says in Lëtzebuerger’s editorial that a Grexit would bring more than just new economic and monetary uncertainties for Greece as well as the euro area and that it would give the whole EU project one of the most serious shocks in its history: the proof that membership in the euro community is reversible. In an interview with Sky News, former British Prime Minister Tony Blair says a Grexit “would be a much bigger catastrophe than we think. I think it would be politically destabilising in a way that would be … very bad indeed. You would have effectively a state whose living standards were being shredded, whose people would be without means of protecting their living standards, and a situation of really high political risk.

Meanwhile, in an interview with Die Tageszeitung, Economist Heiner Flassbeck argues that the ECB must ensure that Greek citizens can get a hold of their money. It is wrong and “possibly illegal” that the ECB is denying them the withdrawal of funds. Mr Flassbeck believes that Greek Minister of Economy Giorgios Stathakis’ demand for further ELA credits is correct and should be fulfilled by the ECB.

In an interview granted to Il Mattino, former ECB Board Member Lorenzo Bini Smaghi stresses that Frankfurt cannot supply more liquidity to Greece’ banks because it would break rules on illegal financing to insolvent member states. He adds, however, that the risk of a political and economic contagion is high especially for weak countries where populism is getting stronger and the public debt is high, too. El Païs‘ Claudi Pérez notes that Greece’s creditors – the EU, IMF and ECB – are discussing a prompt solution to allow Athens to meet a crucial €3.5 billion debt payment to the ECB due on 20 July.


No comments yet
Submit a comment

Policy and networking for the digital age
Policy Review TV Neil Stewart Associates
© Policy Review | Policy and networking for the digital age 2024 | Log-in | Proudly powered by WordPress
Policy Review EU is part of the NSA & Policy Review Publishing Network