LIVE: Temporary Greek exit from eurozone on cards, unless tough reforms implemented
'Greek PM is realising the catastrophic implications of not getting immediate funding'
Finance Minister Edward Scicluna says Greece has to sanction tough reforms by Wednesday if it is to get further help to sort out its financial crisis. He also confirmed that a temporary Greek exit from the eurozone was now on the cards
The Greek Prime Minister is realising the catastrophic implications of not getting immediate funding, he has just told reporters in Brussels.
Eurozone leaders and finance ministers are involved in crucial meetings in Brussels today as Greece's euro fate rests on a knife edge. The European Council meeting with all 28 EU leaders scheduled for this afternoon has been called off to give enough time for eurozone leaders to discuss Greece's debt crisis.
On Friday, Greek MPs backed Prime Minister Alexis Tsipras's tough new proposals to secure a third bailout. The proposals are aimed at staving off financial collapse and preventing a possible exit from the eurozone. Surprisingly, Mr Tsipras's new plan contains many elements rejected in a referendum last Sunday.
However, eurozone finance ministers have raised issues of trust and questioned whether Greece can indeed deliver on its pledges. Germany caused a stir yesterday when its leaked plans mooted a temporary Greek exit from the eurozone or a €50billion grab of the country's assets to pay off its debts.
Greece is asking creditors for €53.5bn to cover its debts until 2018. However, the amount of the new bailout could reach €74bn as Greece seeks a restructuring of its massive debt, which it says is unsustainable.
Herman Grech is in Brussels giving constant updates:
6.35pm - OK so the situation at the moment is this: Greece has been instructed to push through major reforms through its Parliament by Wednesday - that includes huge pension reform - if it is to receive further help from its eurozone partners. Which is ironic, since a week ago, the Greeks voted against such sweeping austerity measures. Can't see the far-left Syria government surviving such reforms. But time will tell.
6.20pm A Greek official says Tsipras will meet German Chancellor Angela Merkel, French President Francois Hollande and European Council President Donald Tusk on the sidelines of the summit.
Greece is racing to convince its international creditors that it will deliver tough reforms- which include tax hikes, pension cuts and privatisations- in order to secure a cash-for-reforms deal and remain in the euro zone.
6pm Joseph Muscat says in a tweet: Eurogroup document is most significant step so far.
5.40pm - Finance Minister Edward Scicluna says Greece has to accept six key actions by Wednesday before any further discussions on bailout. What has led to a change of heart? "Tsipras is realising the catastrophic implications of not getting immediate funding." But he also points out: "If we’re stuck, the alternative would be to negotiate a timeout – a temporary exit."
4.40pm - Meanwhile, anger is mounting among many on the social media that eurozone leaders are demanding too much from a cash-strapped country.
The Euro-terrorists meeting in Brussels think that a 25% contraction of the Greek economy is not enough. They demand more austerity! #Grexit— Philippe Marlière (@PhMarliere) July 12, 2015
4.15pm - Eurogroup meeting is over, and the prospects appear bleak. Head of eurogroup Jeroen Dijsselbloem says "We have come a long way, solved a lot of issues, but some big issues still remain remain". Eurozone leaders will be informed.
4pm - Prime Minister Joseph Muscat says he wants Greece to remain in the eurozone but not at all costs. He says the situation in Greece during the past few days has deteriorated in a "tragic" manner. He says that there needs to be a realisation that what was enough 10 days ago might not be enough today, because the situation in Greece has deteriorated. Asked if there are sufficient conditions to start negotiations, Dr Muscat said that would have to be established but there were at least two eurozone member states that required a parliamentary mandate.
3.45pm - Things are certainly not looking good for Tsipras. German Chancellor Angela Merkel says "the most important currency has been lost: that is trust and reliability." Germany has taken a tough line on Greece and has questioned whether the Greek government will deliver the reforms it has promised in exchange for a financial rescue package. Meanwhile, restrained smiles and exchanges between Merkel and Tsipras at the beginning of the summit. France President Hollande increasingly assuming the role of referee. He says future of Europe is at stake if Greece leaves the eurozone.
3.10pm - Meanwhile, let's remember that while the EU decides Greece's euro fate, Greeks may only withdraw a maximum of €60 after the imposition of capital controls in Greek banks.
3pm - Greek Prime Minister Alexis Tsipras arrives at the summit and says: "We can reach an agreement tonight if all parties want it."
2.50pm - An EU official said the majority of the finance ministers were determined that the Greek offer to accede to new negotiations were "insufficient", so this goes beyond Germany's reluctance to give any concessions to Athens. He didn't say whether they are optimistic a deal can be reached today, but are trying to set the right conditions for new negotiations. Meanwhile, eurozone leaders have started arriving for the crunch meeting.
2.30pm - There's clearly a split between some of the 'big' eurozone countries about Greece's fate. Italian Prime Minister Matteo told Il Messaggero newspaper: “Now common sense must prevail and an agreement must be reached. Italy does not want Greece to exit the euro and to Germany I say: enough is enough." Should be interesting when the leaders meet around the table from 4pm.
2.15pm - Two hours into talks, it's looking increasingly likely there would be no final decision about the Greek debt crisis by tonight. Evidently, some countries have trust issues with Greece.
Eurozone official says hardline countries want to wait until Wednesday to see #greece pass reforms in Parliament before deal— AnneSylvaineChassany (@ChassNews) July 12, 2015
1.10pm - Look behind you! Pictures are coming in from the Eurogroup in process. This picture from Reuters probably says it all: Greek Finance Minister Euclid Tsakalotos sits for the meeting as International Monetary Fund boss Christine Lagarde looks on behind him.
1pm - Reuters reports Luxembourg's foreign minister has made an impassioned plea for Germany to avoid a Greek exit from the euro, warning Berlin of a catastrophic schism with France if it pushes for Athens to leave the currency union.
11.40am - Let's just recall what Greece's latest measures include:
- Standard VAT rate of 23%, including restaurants and catering.
- Phase out solidarity grant for pensioners by 2016.
- Srapping 30% tax break for wealthiest islands.
- Cut defence spending cuts by €300m by 2016.
- Privatise ports and sell-off remaining shares in telecoms giant OTE.
11am - Maltese Finance Minister Edward Scicluna says Greek figures just keep going up and are not credible. He says ministers of different countries, including Malta, are exploring ways of extending the present agreement but could not favour a debt haircut. He says it doesn't make sense for Greece to leave the eurozone in a haphazard manner. Malta is prepared to support Greek bailout provided a proper monitoring framework is in place.
10.50am - Italian Finance Minister Padoan tells reporters that the main obstacle to moving forward is lack of trust. Wants Greek Parliament to start taking steps tomorrow.
10.40am - Prime Minister Joseph Muscat says Malta wants a solution but not at any price. Let's remember Malta had loaned Greece €170 million, which was now equivalent to two per cent of GDP.
10.13am - Christine Lagarde, the head of the International Monetary Fund, arrives for meeting without giving any comments to the press.
9.55am - EU Council President Donald Tusk says he has cancelled EU leaders summit for this afternoon to give space for eurozone leaders to discuss the Greek debt crisis.