Eurozone summit possible on Sunday to back plan for Greece-sources (1)
07-07-2015 21:13
(Adds more details of timetable, Greek official)
By Julien Ponthus
BRUSSELS, July 7 (Reuters) - Euro zone leaders could hold a
further emergency summit on Sunday to approve a plan to aid
Greece if creditor institutions are satisfied with a Greek loan
application and reform commitments, two senior EU sources said.
The leaders were meeting on Tuesday evening in Brussels with
Greek banks shuttered and fast running out of cash and the Greek
economy on the verge of collapse.
The sources set out a tentative timetable that could offer a
breakthrough to keep Greece afloat and in the euro zone,
provided it accepts credible reforms and spending cuts to make
its public finances sustainable in the mid-term.
Greece is expected to submit a formal request for a
medium-term assistance programme from the European Stability
Mechanism rescue fund within hours and euro zone finance
ministers have said they will hold a conference call in
Wednesday morning to consider that request.
The three institutions representing the creditors - the
European Commission, the International Monetary Fund and the
European Central Bank - would then take two or three days to
make a first analysis of the feasibility of the Greek proposals.
In parallel, Greek Prime Minister Alexis Tsipras was
expected to put forward a reform plan on Wednesday that would
entail so-called "prior actions" to be put into law in Greece
before the next emergency summit.
A Greek government official said it would make sense to put
some initial measures through parliament before the weekend.
If all went to plan, the German parliament could on its last
day before the summer recess give the government a legally
required mandate to start negotiations on a new programme for
Greece, one of the sources said.
If the institutions gave their green light and the German
parliament approved, euro zone leaders could meet again probably
on Sunday evening to give political approval for detailed
negotiations on a two-or-three-year bailout programme.
That deal could also include some commitment by the euro
zone to reprofile Greece's debt, but no write-downs, two sources
said.
They said new Greek Finance Minister Euclid Tsakalotos had
not requested any "haircut" during a meeting of euro zone
finance ministers but had used the term "reprofiling", which
involved stretching out the maturities of existing loans and
possibly lowering interest rates and granting a longer debt
service moratorium.
Greece would receive a short-term interim financing
arrangement to meet a crucial 3.5 billion euro July 20 bond
redemption to the ECB and to clear arrears of 1.5 billion euros
with the IMF, another source said.
A Greek government source confirmed that Athens was seeking
an interim financing deal to cover its debt service hump over
the summer ahead of a longer-term programme.
The EU sources were reluctant to discuss how Greece's
short-term needs would be funded.
Two sources said it would be a mixture of releasing 1.9
billion euros in profits returned by the ECB to member
governments on its Greek bond holdings, and either bilateral
loans from friendly countries or a decision by the ECB to allow
Greece to issue more short-term Treasury bills.
However, a source familiar with the discussions said the ECB
could not allow Greek banks to buy any more Treasury bills,
since that would clash with its responsibility as banking
supervisor for ensuring their solvency and avoiding indirect
monetary financing of the Greek government.
(Additional reporting by Tom Koerkemeier and Renee Maltezou;
Writing by Paul Taylor; Editing by Alastair Macdonald and Ralph
Boulton)