Eurogroup chairman says it’s too late to extend Greece bailout

Jeroen Dijsselbloem says country’s stance towards its creditors would have to change

The chairman of the Eurogroup said on Tuesday Greece is on track to default at midnight and Athens' stance towards its creditors would have to change before its euro zone partners could consider any additional financial assistance.

Speaking after an emergency conference call between the currency bloc's finance ministers, Jeroen Dijsselbloem said a last-minute request by Greek Prime Minister Alexis Tsipras to extend Greece's current bailout programme had fallen on deaf ears.

“We’re beyond that point, it comes too late,” he said. He said that as a member of the euro zone and European Union, Greece is welcome to request a new assistance programme, but it would come with strings attached.

“That is quite a procedure to go through,” he said. “In the meantime the situation in Greece, the economy, the Greek banks, has deteriorated, unfortunately even more, so that’s a difficult path to consider.”


Dijsselbloem, who is also the Netherlands’ finance minister, said any new programme might impose tougher conditions than the previous one.

He said that in any case no new programme could be agreed until after Greeks have voted in a referendum on Sunday, and until the government’s attitude changes.

“What can change is the political stance of the Greek government that has led to this unfortunate situation,” he said.

The Greek government had requested a new bailout deal from the euro zone, hours before its bailout expires and it must repay €1.6 billion to the International Monetary Fund (IMF).

Greek prime minister Alexis Tsipras made the request to the European Stability Mechanism to cover all the country’s financial needs for the next two years, along with a debt-restructuring plan, his office said.

Euro zone finance ministers discussed the Greek offer during a teleconference on Tuesday evening.

Earlier German chancellor Angela Merkel responded to the proposal by saying she does not expect any new developments on Greece on Tuesday, appearing to dash hopes of a last-minute deal being agreed before the bailout programme expires at midnight.

Ms Merkel said that Germany will not negotiate on a new bailout agreement for Greece before its referendum, which is planned for Sunday.

“Before a referendum, as planned, is carried out, we won’t negotiate on anything new at all,” Merkel said.

She added that this applied regardless of whether new offers were made on Tuesday, suggesting it was now too late to vet them.

Merkel placed the blame on the Greek government for allowing its bailout programme to expire.

Ms Merkel also said the consequences of the Greek crisis could be cushioned well and there was no need to fear the effects on the euro zone, according to reports.

She said Germany could not consider any new proposal from Greece until Sunday’s referendum has taken place.

She also said it was important for the 18 remaining euro zone countries to stand together and while compromise between partners was important, there should be no compromise for its own sake, said the sources.

The Greek government said it would continue negotiations seeking a “viable agreement” within the euro area.

Speaking in the Dáil Taoiseach Enda Kenny welcomed the new proposal put forward by the Greeks.

Earlier it had been reported that the European Commission has made a last-minute offer to try to persuade Mr Tsipras to accept a bailout deal he rejected before a referendum on Sunday.

Greek finance minister Yanis Varoufakis earlier confirmed Greece will not pay the €1.6 billion IMF debt due to be paid by 11pm. Greece has received nearly €240 billion in two EU/IMF bailouts since 2010.

The last-ditch bid for a deal came as uncertainty built ahead of Sunday’s referendum, with a string of European leaders warning it would effectively be a choice between remaining in the euro or reverting to the drachma.

However, German finance minister Wolfgang Schaeuble said on Tuesday Greece would not have to leave the euro zone if voters said ‘No’ in the referendum.

Under Jean-Claude Juncker’s offer, Greece’s prime minister Alexis Tsipras would have to send a written acceptance by Tuesday of the terms published by the EU executive on Sunday and agree to campaign in favour of the bailout in the planned July 5th referendum.

The IMF has said late-payers do not get a grace period. Failure to pay means Greece will become the first developed nation in history to default to the IMF and joins a club of countries in arrears that includes Sudan, Somalia and Zimbabwe.

While one missed payment is not expected to trigger a wave of defaults, it is a defining moment in the Greek crisis that some European leaders fear could unravel 60 years of European integration.

On Monday night, thousands of anti-bailout protesters poured on to the streets of Athens and Thessaloniki, accusing Greece’s creditors of blackmail and calling for a no vote in a referendum on Sunday.

While Greek banks remained closed for a second day on Tuesday the country plans to re-open 1,000 bank branches from Wednesday to cater for pensioners who do not use cash cards for ATMs, the finance ministry said on Tuesday.

Although ATMs are working, many older people who do not use debit or credit cards were unable to collect their pensions.

Under the new capital controls, the daily withdrawal limit for holders of Greek credit and cash cards has been set at €60. However, tourists and holders of foreign bank cards are exempt from these restrictions.

The finance ministry reiterated assurances that bank deposits would remain safe after Sunday’s referendum on the terms of a bailout agreement with foreign lenders which the government has rejected.

Mr Tsipras has said he will “respect the outcome” of Sunday’s referendum and act in accordance with the Greek constitution, in a strong suggestion that he will resign if the public vote Yes.

In an live interview to Greece’s public broadcaster ERT, which his government reopened last month on the first anniversary of its overnight closure by the previous government, Mr Tsipras also rejected the suggestion, made by a number of European leaders earlier in the day, that a No vote will lead inevitably to a Grexit as he said it would prove too costly for the other side.

Mr Juncker has called for a Yes vote in the referendum.

“All elements were on the table,” he said at a news conference in Brussels. But, he added, Mr Tsipras “left the talks at the worst moment” and without warning.

A yes vote in the referendum would be a “positive signal” for the euro zone to continue aiding Greece, he said, while a no vote “would mean Greece is saying ‘no’ to Europe.”

Italian prime minister Matteo Renzi has warned against turning the referendum into a personality contest between Mr Tsipras and Mr Juncker or Ms Merkel.

“This is not a referendum on European leaders. This is a run-off vote: euro or drachma,” Mr Renzi told the Italian business daily Il Sole 24 Ore.

Additional reporting agencies

Suzanne Lynch

Suzanne Lynch

Suzanne Lynch, a former Irish Times journalist, was Washington correspondent and, before that, Europe correspondent

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times

Damian Mac Con Uladh

Damian Mac Con Uladh

Damian Mac Con Uladh is a contributor to The Irish Times based in Athens