Door still open for solution to Greek impasse, say institutions

The European Commission and the IMF have said the "door is still open" for Greece to negotiate with lenders, as the European Commission published the institutions' latest bailout offer to Greece yesterday.

Amid growing concerns that Greece is heading towards default, the European Commission took the unusual step of publishing the full text of the bailout proposal under discussion on Friday in Brussels before talks broke down.

“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,” the commission said in a statement yesterday, adding that the document also took into account the proposals of the Greek authorities.

The text contains few additional measures, though it does suggest that the lenders had endorsed Greece’s request to include hotels in the 13 per cent VAT bracket rather than the 23 per cent rate as had been urged by creditors.

EU economics commissioner Pierre Moscovici said yesterday Greece still had the option of negotiating. "The door is still open for negotiations on the latest EU Commission proposals . . . Greece should stay in the euro," he tweeted.

The move to publish the proposal comes after months of leaks and counter-leaks about the Greek bailout discussions that have been ongoing since February. The conciliatory signs from the commission come after the eurogroup of finance ministers appeared to categorically rule out a continuation of bailout discussions.

‘Bridging gaps’

Gathering in Brussels on Saturday for their fifth eurogroup meeting in a little over a week, finance ministers insisted that Greece had “unilaterally” broken off the discussions.

Minister for Finance Michael Noonan said he had expected discussions to continue on "bridging the gaps" between the competing proposals on the table on Thursday.

“While there was some significant divergence between certain aspects of the two papers, there were a lot of common positions as well . . . I think the Greek people need a solution and I thought there was a basis for a solution in the two papers and in the merging of the two papers.”

Referendum question

It is not clear whether the published proposals could form the basis for the referendum question that will be proposed by the Greek government to their electorate. Greek MEPs voted late on Saturday to support prime minister Alexis Tsipras’s decision to hold a referendum next Sunday.

Mr Tsipras’s Syriza party has said it will campaign for a No vote in the referendum, describing the bailout programme as “humiliating”.

Christine Lagarde, the head of the IMF, also suggested that the door was still open for talks if Greece accepted the lenders' proposal.

“If the Greek authorities are prepared to talk, we stand ready,” she told the BBC. But she added that plans by the Greek government to hold a referendum on whether to accept further euro zone austerity measures will be invalid after Tuesday, when the country’s programme expires.

Ms Lagarde briefed the IMF board on the latest developments in Greece yesterday.

“I shared my disappointment and underscored our commitment to continue to engage with the Greek authorities,” the IMF chief said in a statement, noting that the coming days will “clearly be important”.