Euro zone officials focus on Greek debt as repayment deadline nears

Written by on June 22, 2015 in Europe - Comments Off on Euro zone officials focus on Greek debt as repayment deadline nears

Officials in the 19-nation euro zone are focusing on debt-ridden Greece in a series of meetings Monday as they work to prevent the country from defaulting on its loan payments at the end of the month.

Greek prime minister Alexis Tsipras is holding talks with the heads of the International Monetary Fund, the European Central Bank and the European Commission after unveiling a proposal Sunday that his office called a “mutually beneficial agreement that will give a definitive solution” to the problem.

Greece will also be a main topic as euro zone finance ministers have their own meeting and the leaders of those countries hold a summit.

The summit was called after multi-national talks about the terms of the ongoing $17.5 billion Greek bailout collapsed last week over the government’s refusal to adopt new austerity measures demanded by its European creditors. Greek leaders say the cuts go too far and are crippling the country’s economy.

The short-term need is a plan for dealing with a $1.8 billion loan repayment due to the International Monetary Fund at the end of June. Missing that payment could set the stage for Greece’s possible departure from the group of nations that use the euro currency.

Thousands of demonstrators marched Sunday in European cities in a show of anti-austerity solidarity ahead of the meetings Monday. They argued that the financial sector should take responsibility for the damage it caused.

Britain’s Guardian newspaper, quoting officials close to the negotiations, said creditors are proposing a plan to extend the Greek bailout by six months and provide nearly $15 billion in emergency relief. The report said negotiations continued late into Sunday evening and that a breakthrough hinged on Greece agreeing to further austerity measures that it has so far resisted.

In a stop-gap move Friday, the European Central Bank agreed to extend an additional $3.4 billion to Greek banks, after worried customers withdrew more than $4 billion in savings in the past week. Reuters news agency reported Sunday that an additional $1.1 billion was withdrawn since then, and said the ECB was considering further financial help over fears that Greek banks would be unable to open Tuesday.

Source: VOANews.com

(Photo:  Pedro Moura Pinheiro/flickr.com)

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