Saturday, June 27, 2015

Greek PM Calls For Referendum:

Greek Prime Minister Calls for Referendum on Bailout Terms - The New York Times

In an unexpected move, Prime Minister Alexis Tsipras went on national television early Saturday to call for a referendum on July 5, so that Greek citizens can decide whether to accept or reject the terms of a bailout deal proposed by the country’s creditors.

With his speech, Mr. Tsipras upends the stalemate in negotiations between Greece and its creditors, throwing into doubt whether Greece will be able to make a 1.6 billion euro debt payment that is due on Tuesday to the International Monetary Fund, while also deepening concerns that the beleaguered country could leave the eurozone.

Mr. Tsipras said he was calling the referendum because Greece’s creditors — the I.M.F., the European Central Bank and the eurozone countries — had refused to negotiate in good faith and present a fair compromise.

“After five months of tough negotiations, our partners ended up with a proposal in the form of an ultimatum,” Mr. Tsipras said, arguing that the creditors were calling for “new, unbearable measures,” including cuts to pensions, salaries and tax increases.

“The goal of some of Greece’s partners is the humiliation of an entire nation,” he adde

For Mr. Tsipras, the bold move is rooted in his political predicament. He led the leftist Syriza party to victory in January after promising voters that it would reverse austerity and ease punishing economic policies toward the poor.

But the negotiations with creditors have forced him to make numerous concessions, whether on changing pension programs, raising taxes or privatizing state assets.

His staunchest supporters had warned that Mr. Tsipras could only be pushed so far. Apparently, Mr. Tsipras decided that his political legitimacy depended on leaving the ultimate decision on the creditors’ proposal to voters, despite the potential upheaval of holding a referendum at such a critical time.

European finance ministers had been scheduled to meet for a final round of negotiations in Brussels on Saturday, but Mr. Tsipras said he would convene Greece’s Parliament and ask lawmakers to vote on whether to hold the referendum, which would ask Greeks to decide whether they accept the creditors’ proposal.

Mr. Tsipras said that he had relayed his decision to Chancellor Angela Merkel of Germany, President François Hollande of France and Mario Draghi, head of the European Central Bank. He said he would send letters to Greece’s creditors on Saturday asking that they allow the country’s bailout program — scheduled to end on Tuesday — to be extended “for a few days” so that Greek voters could decide on the referendum.

Mr. Tsipras used his speech as another opportunity to lash out at the I.M.F., which has pushed hard for cuts to public spending. He declared that the creditors’ proposal reflected “the I.M.F.’s fixation on tough and punishing austerity.”

Nikos Pappas, minister of state and a member of the Greek negotiating team, took a similar tone in a statement after the premier’s speech, saying the creditors’ proposal was “not in keeping with the popular mandate and the future of growth in Greece.”

Friday was a day of tough negotiations in Brussels, with creditors and European leaders suggesting that Greece now had to decide. Ms. Merkel indicated that creditors had made their final offer to ease Greece’s debt crisis, on terms she described as “extraordinarily generous.”

That final offer — detailing the economic changes Greece must make to receive additional money — was extended to Mr. Tsipras when he met with Ms. Merkel and Mr. Hollande on the sidelines during the negotiations, Ms. Merkel said. When asked by a reporter whether there was a Plan B, Ms. Merkel said simply, “No.”

Leaving the meeting, Mr. Tsipras still gave no indication of being ready to settle. But he might still have considerable leverage as the talks go down to the wire. Eurozone lenders are wary of letting Greece go bankrupt and potentially become the first country forced out of the eurozone, membership in which is meant to be irreversible.

If there is no resolution to the standoff, Greece will not have enough money to service its loans — including a payment of about €1.5 billion to the I.M.F. on Tuesday — or, soon, to pay government salaries and pensions.

Two of the sticking points have been how much Greece is willing to cut costs by revamping its national pension program, and how the country plans to revise its notoriously porous tax collection system.

“The government does not have a popular mandate, nor the moral right, to sign a new memorandum,” a Greek official said, speaking on condition of anonymity as is the government’s policy.

Asked about the state of the talks with Greece, Mr. Schäuble, Germany’s finance minister, said at a news conference in Frankfurt on Friday that Greece should follow European rules or face the consequences.

“When you are driving down the autobahn, and everyone else is driving in the opposite direction, you may think that what you are doing is right, but you are still wrong,” he said.

No comments: