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09/09 -Athens’s (new) deadline fixed for Sunday by the EU

Today’s media outlets first report about the new deadline imposed to Athens. It is said, in that sense, that European Council President Donald Tusk has issued a statement imposing a deadline of Sunday for Greece to reach an agreement with its creditors over the terms of a new bailout, as reported – among others – in The USA Today.

In his statement, he stressed that “our inability to find an agreement may lead to the bankruptcy of Greece and the insolvency of its banking system. Tonight, I have to say loud and clear that the final deadline ends this week,” Mr Tusk added. Le Figaro says that Sunday’s deadline is pressing Athens both on a political and economic front. The bankruptcy of at least one of the four major Greek banks is on the cards if the ECB cuts off its liquidity assistance. Mr Tusk warned about the geopolitical threat of a Greek default while European Commission President Jean-Claude Juncker said he has a scenario to cover all contingencies, adds the French daily.

Austrian Chancellor Werner Faymann said, in an interview with Die Kurier, that he and Mr Juncker have agreed that he will mediate between Greek Prime Minister Alexis Tsipras and his EU counterparts “if necessary.” “I will also involve Thomas Wieser, Austrian chief coordinator of the Eurogroup, and Austrian Central Bank Governor Ewald Nowotny,” he further said. In an interview with ZDF, EC Vice-President Valdis Dombrovskis said a solution to the Greek crisis must be found “relatively soon.” He expected Greece to present a “credible and comprehensive” programme on how the government wants to guide the country out of the crisis and how to ensure financial stability and boost economic growth.

In an interview with the LTV 1, VP Dombrovskis stressed that a Grexit is the worst solution from economic standpoint not only for Greece but also for the whole euro area. The French press publishes two interviews with EcoFin Commissioner Moscovici, saying – to France 2’s 4 Vérités broadcast – that we should not close our door to Greece. He stressed that the European Commission has, since the very beginning, tried to play the role of mediator and to bring harmony among the European institutions. “For me, a Grexit would be a terrible, a collective failure” that we can still avoid, but it is now up to the Greeks to show their determination to achieve the necessary reforms, which have only been postponed for too long, he added.

On France Info, Commissioner Moscovici refused to talk about a plan B, saying that the “absolute” will of European Commission “is for Greece to stay in the euro area” with an agreement on Sunday. As other major economic news, the press reports about the speech made yesterday by Greek PM Tsipras in the European Parliament Plenary in Strasbourg, during which he pleaded for a compromise in front of MEPs who were overtly hostile for half of them, as says – among others – Arte.

Several newspapers, including Die Welt and Il Sole 24 Ore, note that PM Tsipras spoke of previous aid programmes in Greece as failed experiments and “austerity laboratories.” During his speech, he was applauded by MEPs from left- and right-wing radical parties, prompting MEP Manfred Weber to claim that Mr Tsipras was surrounding himself with “false friends.” EC President Jean-Claude Juncker, who Mr Tauber claims has done more to build bridges in the last few months than anyone else, stoically listened to the speech, withholding applause at the end, further reports Die Welt.

The Times reports that PM Tsipras insisted he had “no secret plan for Grexit.” El Païs says that Mr Tsipras regretted “Europe’s inability to solve its debt crisis,” though admitting Greece’s fault for its own financial woes, saying that “Greece is on the verge of bankruptcy because previous governments created a clientelist state for many years.” Kathimerini notes that the Greek PM appeared reassuring concerning the scenario for his country.

It is also reported, in The INYT, L’Echo, Vecer and Star TV for instance, that Greece officially asked yesterday its European partners for a new three-year rescue. Greece promised to take fresh steps on contentious issues such as taxes and pension pay-outs as early as next week. It also pledged to take unspecified “additional actions” to “strengthen and modernise” its bankrupt economy.

The Greek TV also reveals that the European technocrats are discussing a loan of around €50-100 billion with the aim to reassure the markets. Corriere della Sera says that Eurogroup President Jeroen Dijsselbloem sent a letter to the ECB and the European Commission after Greece officially called for a loan, asking whether there is a risk of financial stability and whether the Greek public debt is “sustainable”. A lot of – negative – comments on the EU’s attitude and pessimistic analyses on a potential Grexit continue to be released.

In an interview with L’Observer, former Commission President Romano Prodi comments on the Greek crisis and its effect on the EU. Mr Prodi “never thought the referendum would be decisive”. The Greeks did not vote on whether they wanted in or out of the EU or euro area, “they just said they wanted to pursue negotiations,” he stresses. In an interview with Le Figaro, Robert Schuman Foundation President Jean-Dominique Giuliani salutes the “infinite patience” of European countries towards a Greek government which has so far been unable to present a credible plan to clean up Greece’s finances. He claims that the Greek situation reveals the “pointlessness and craziness” of populist platforms on the euro and the EU, from the left or the right.

In an interview with Die Zeit, former German Foreign Affairs Minister Joschka Fischer states that all roads lead to a debt cut. He says that although he never wanted a Grexit to take place, he cannot imagine a compromise which allows all parties to save face and does not know how Greece´s future in the euro area would look. The Evening Standard reports that Bank of France Governor Christian Noyer has warned that riots could erupt in Greece if its economy collapses following a Grexit. It quotes him as saying “we are in an abnormal situation that can no longer last.”

An El País editorial suggests that a pact between the EU and Greece will be unlikely if both camps move much further away from the terms of the bailout deal that had almost been agreed before Alexis Tsipras decided to call a referendum. The Times’ Simon Nixon predicts that a Grexit will plunge the country into “economic and social chaos”, and underlines that “a majority of [euro area] countries are ready to take this risk.”

Another item in The INYT says that the single currency is now the obstacle to bringing Europe “ever close”’. The Greek crisis shows that the fault lies with the euro itself. Meanwhile, Martin Hellwig writes in an opinion piece for Der Tageszeitung that the ECB is blackmailing Greece. The consequences of freezing emergency loans go against the ECB’s duties and damage the Greek banking system.


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