European Parliament President Urges Greece to Back Austerity Deal

Martin Schulz says consequences would be ‘dramatic’ if Greece rejects creditors’ proposal

The Wall Street Journal

By EYK HENNING

June 7, 2015 4:35 a.m. ET

FRANKFURT—The President of the European Parliament on Sunday urged Greece to accept the austerity measures creditors have called for in return for relaxing bond-repayment rules.

“I can only warn the Greek government...not to reject [our] extended hand,” Martin Schulz told German weekly Welt am Sonntag. He said the time for striking an agreement was running out and the consequences of a final refusal by Greece would be “dramatic.”

His statements come after Greek Prime Minister Alexis Tsipras on Friday called international creditors’ conditions for a bailout deal “irrational” and an “unpleasant surprise,” but said a final deal after months of negotiations is closer than ever.

While leading German politicians on Saturday ruled out further concessions for Greece, Austria’s Chancellor Werner Faymann pushed for a five-year plan that would see debt repayments significantly postponed, tied to strict conditions. A potential Greek insolvency poses “contagion risks for other countries,” Mr. Faymann told Austrian daily Österreich on Sunday.

In an emergency parliamentary session Friday, called by the Greek premier to inform lawmakers about the state of the country’s bailout talks, Mr. Tsipras repeated his opposition to key measures that creditors want.

The proposed measures include cutting pensions and increasing sales taxes, which he initially rejected after the creditors’ terms were put to him at a meeting with European officials in Brussels on Wednesday. The demands go against the antiausterity promises that swept Mr. Tsipras and his left-wing Syriza party into office in January.

Greece’s main lenders—other eurozone governments and the International Monetary Fund—this week agreed on an outline for a proposed deal that European officials said could only be sweetened marginally. Despite an already deeply depressed economy, the proposal requires Greece to impose further sharp austerity measures, without which lenders insist Greek debt can’t be brought under control.

Write to Eyk Henning at eyk.henning@wsj.com