Still Deadlocked With Greece, Europe Sets Emergency Summit Meeting

By JAMES KANTERJUNE 18, 2015

The New York Times

LUXEMBOURG — European leaders will try again in an emergency summit meeting on Monday to break the deadlock between Greece and its international creditors after a meeting of eurozone finance ministers ended on Thursday with no deal on Greece’s bailout.

Without additional aid, Greece faces the prospect of effectively going bankrupt by the end of June, when it owes a payment of 1.6 billion euros, or about $1.8 billion, to the International Monetary Fund, and when the European part of its bailout program ends.

“Too little progress has been made,” Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers, said at a joint news conference with Christine Lagarde, the managing director of the International Monetary Fund, and Pierre Moscovici, the European commissioner for financial affairs.

“No agreement as yet is in sight,” said Mr. Dijsselbloem, who added there was still a chance to reach a deal, though “very little time remains.”

Talks between Athens and its creditors were expected to continue over the weekend as both sides insisted they wanted Greece to remain a member of the 19-nation currency bloc but were far apart on what Athens must do to keep its membership.

Donald Tusk, who represents the leaders of European Union nations, called a summit meeting for Monday of the leaders of the 19 E.U. members using the euro. It was, Mr. Tusk wrote on his Twitter account, “Time to discuss the situation of Greece at highest political level.”

Around 8,000 people joined a peaceful demonstration outside Parliament on Thursday night in Athens, calling on the government to seek a compromise with creditors and secure the country’s place in the euro.

A failure to make the June 30 payment could prompt Greece’s creditors in the eurozone to ask for accelerated repayment of the huge loans they have granted to the small country. The creditors — the other eurozone countries, the International Monetary Fund and the European Central Bank — have committed to €240 billion in bailout loans over the last five years, but an end to the current program would mean that billions in frozen aid would no longer be available to Athens.

A default on its loans would also make it far more difficult for the European Central Bank to continue supporting badly strained Greek banks with emergency funding.

Creditors say they are still waiting for Greece to signal its readiness to compromise by pruning its pension payments and committing to other changes in exchange for continued aid. At that point, eurozone lenders could unlock frozen bailout funds and even offer Greece some debt relief.

Yanis Varoufakis, the Greek finance minister, told reporters that the government in Athens was seeking to “solve the Greek crisis once and for all,” but that he warned his counterparts that “we are dangerously close to a state of mind which accepts an accident.”

He added that Athens could not accept proposals from the creditors that would “simply jack up already high tax rates and reduce benefits to the weakest.”

He described plans he had presented to the Eurogroup for a “fiscal council” to help oversee management of the Greek budget and other plans for a “smoother” schedule for debt repayment. But the plans were received without “a single comment,” he said.

The lack of action on Thursday was a “strong signal for Greece to engage seriously in negotiations,” Valdis Dombrovskis, a vice president for the European Commission, which helps oversee Greece’s adherence to its bailout terms, wrote on his Twitter account. He added that the finance ministers were ready to reconvene “at any moment.”

The creditors had put forward “proposals that are a clear easing from what was previously considered,” Ms. Lagarde of the International Monetary Fund told the same news conference. To be acceptable, counterproposals by the government in Athens could not be “smoke and mirrors,” she said.

Earlier in the day, the Greek government appeared to be digging in its heels. Euclid Tsakalotos, a Greek government deputy minister who is in charge of coordinating negotiations for his country, told BBC radio before the ministers’ meeting that Athens was still seeking an “economically feasible plan” and would not accept any alternatives.

Mr. Tsakalotos seemed to acknowledge that his government’s position would come into question if the negotiations failed to yield an “economically Anoviable” agreement. In that case, the government would “consult the Greek people,” he said, apparently suggesting that a referendum, or even new elections, might be required at that point.

Chancellor Angela Merkel told the German Parliament on Thursday that there was still time for Greece and its creditors to reach an agreement.

“Germany’s efforts are directed toward keeping Greece in the eurozone,” said Ms. Merkel. “Where there is a will, there is also a way,” she said, repeating a phrase she has used frequently in recent days.

Alison Smale contributed reporting from Berlina, Niki Kitsantonis from Athens.