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Jul 12, 2015 11:40 PM

The Latest: Greece sticking points are IMF, privatization

The Associated Press

BRUSSELS (AP) The latest from Greece's financial crisis (all times local):


5:30 a.m.

A Greek official says Prime Minister Alexis Tsipras has two issues to settle with European creditors before he's in a position to reach an agreement that would help shore up his country's finances and its future in the euro.

The official, who is speaking on condition of anonymity because the talks are ongoing, says the sticking points are the future involvement of the International Monetary Fund in Greece's bailout program and a proposal that Greece set aside 50 billion euros ($56 billion) worth of state-owned assets in a fund for eventual privatization.

The eurozone's 19 leaders were still meeting at dawn Monday after Tsipras wrapped up his third four-way meeting with German Chancellor Angela Merkel, French President Francois Hollande and Donald Tusk, who chairs meetings of European leaders.

The official said that if there is an agreement, Greek banks may be in a position to get help from the European Central Bank soon. Without it, they risk running out of money this week.

-By Menelaos Hadjicostis.


4:25 a.m.

The 19 European leaders gathered to negotiate another bailout for indebted Greece are considering a compromise proposal.

In a tweet, spokesman Preben Aamann says host Donald Tusk is reconvening the summit, which has paused several times.

The compromise proposal early Monday followed more than 12 hours of deliberations in Brussels, in which Greek Prime Minister Alexis Tsipras sought to persuade his creditors in the eurozone to grant him a bailout deal that will secure Greece's financial future and its place in the euro.


2:20 a.m.

The leaders of the eurozone are a hit on Twitter Sunday night. Unfortunately for them, the trending of #ThisIsACoup is all hostile.

As the eurozone leaders push a list of demands in exchange for giving Greece essential short-term financial aid, many people are taking to social media to back Greek Prime Minister Alexis Tsipras. They say the proposals on everything from pension rules to privatizations amount to a coup.

The term is topping Twitter.com's list of hashtag trends.

Even the Nobel Prize-winning economist Paul Krugman got into the act early Monday: "This Eurogroup list of demands is madness. The trending hashtag #ThisIsACoup is exactly right."


1:25 a.m.

Cyprus government spokesman Nicos Christodoulides says in a tweet that the summit of the eurozone's 19 leaders will not reconvene before 2 a.m. Brussels time "at the earliest."

The summit on Greece has broken up on at least two occasions since the discussions began mid-afternoon Sunday. Among the key meetings have been those involving Greek Prime Minister Alexis Tsipras and the German and French leaders.

European officials, who asked to remain anonymous because the talks were ongoing, said early Monday that difficulties included the privatizations that Athens would have to enact and Greece's problems meeting its short-term debt repayments and the liquidity situation of its cash-starved banks.

---By Raf Casert in Brussels.


11:20 p.m.

European officials said talks between Greece and its European creditors appear to be stuck on several issues and a resolution is not anticipated for a while yet.

One official, who spoke on condition of anonymity because he was not authorized to speak publicly, said the main difference centered on when the European Central Bank could start to increase its emergency liquidity assistance to Greek banks.

Greek Prime Minister Alexis Tsipras wants a deal to pave the way to ECB help as soon as Monday, the official said, while European creditors would prefer to wait until the Greek Parliament passes several austerity measures.

Another official, who also spoke on condition of anonymity, said some issues remain difficult, including a proposal for Greece to transfer billions of euros worth of state assets to an independent fund in Luxembourg under European supervision.

---By Menelaos Hadjicostis in Brussels.


9:10 p.m.

The U.S. Treasury Department says Secretary Jacob Lew is "encouraged by reports of some progress" in Brussels at an emergency summit of eurozone leaders about Greece.

Lew noted that Greece is showing signs of "political will to implement difficult reforms."

In a statement issued on Sunday, Lew urged all sides to show flexibility.

He said that rebuilding trust between Greece and its creditors requires a tradeoff between Greek reforms and "measures" to ensure Greece's debt load is manageable.


7:10 p.m.

Another issue facing the eurozone's 19 leaders is whether Greece needs debt relief.

A draft document sent to leaders acknowledges "serious concerns" over the sustainability of Greece's debts but there doesn't appear to be a consensus on what to do.

The issue, like the idea of a temporary Greek exit from the euro, was bracketed in the document obtained by The Associated Press, meaning it was passed to leaders for their consideration.

The Greek government has made debt relief a key plank of its negotiating strategy over the past few months.

Greece's debts stand at around 320 billion euros ($355 billion), or a staggering 180 percent of the country's annual GDP. A direct cut is unlikely but Greece could get longer repayment schedules or cuts in the interest rates it pays on those debts.


6:50 p.m.

Greek Prime Minister Alexis Tsipras was meeting with French President Francois Hollande and German Chancellor Angela Merkel during a break in discussions at the emergency meeting of the eurozone's 19 leaders.

A Greek official gave no further details about the meeting, which also included Donald Tusk, who chairs meetings of European leaders.

Sunday's summit was dealing exclusively with Greece, which desperately needs a deal with European creditors to stave off immediate financial collapse and the country's potential exit from the euro.

But any deal looks like it will require the Greek government to impose tough austerity measures.


6:30 p.m.

The Greek government appears to have accepted a raft of demands from European creditors that it had previously condemned.

Among a series of proposals that made it into a draft document sent to eurozone leaders, Greece has accepted that officials from the creditor institutions will have some sort of base in Athens.

It remained unclear whether that ability "to work on the ground" will be similar to the hands-on oversight the country underwent after the country's initial bailout in 2010. Many in Greece hated what they considered foreign meddling in their affairs.

Elsewhere in the eurogroup document obtained by The Associated Press, Greece has agreed to carry out "ambitious" pension and market reforms, and "significantly" scale up its privatization program.

According to the document, the Greek government has agreed to legislate a first set of measures by Wednesday.


6:20 p.m.

A temporary Greek exit from the euro is up for potential discussion at this evening's summit of the eurozone's 19 leaders.

At the conclusion of a 4-page draft document of proposals put to leaders and obtained by The Associated Press, eurozone finance ministers said Greece should be offered "swift negotiations on a time-out from the euro area with possible debt restructuring" if no bailout deal is agreed.

The measure of a potential temporary Greek exit was bracketed in the document, meaning that it was passed to leaders for their consideration.

In the document that shows that Greece has moved a long way to meeting creditors' demands, the so-called eurogroup said the country may need between 82-86 billion euros ($91-96 billion) in financing.


6:05 p.m.

Russia says it is considering supplying energy directly to the government of Greece, where doubts have been raised about the ability of Greek state-run companies to pay for imports of oil and natural gas.

The state-run companies were ordered to put their reserves into a central account, which the state has been using to cover expenses such as salaries and pensions as liquidity ran out in the country.

Russian Energy Minister Alexander Novak said Sunday that Russia intended to support the recovery of the Greek economy by widening cooperation in the energy sector. In connection with this, he said Russia was studying options for direct supplies to the Greek government and hoped to reach an agreement in the next few weeks.

Greece imports the vast majority of its gas from Russia.


5:10 p.m.

Italy's premier says Europe needs to deal with the Greek crisis once and for all and move on to other pressing problems confronting the continent.

Matteo Renzi said on his arrival for an emergency summit of the eurozone's 19 leaders that "there's a great need for Europe to go back to do what it needs to do" and tackle issues.

He highlighted the uncertain situations in Libya and Ukraine as well as the terror attack on Italy's consulate in Cairo and the Iran nuclear talks.

He said Europe risks "losing the trust" of its citizens if it can't grapple with these issues effectively.

Renzi said differences between Greece and its creditors "are not just details," but that the distance between the two sides "has been greatly shortened."


4:40 p.m.

One of Greece's most outspoken critics, Finnish Finance Minister Alexander Stubb says bailout discussions with the country have taken "a good leap forward."

Following two days of talks between the Greek finance minister and his peers in the 19-country eurozone, Stubb says a package of proposals have been sent to leaders for discussion at their emergency summit meeting in Brussels.

Stubb says they involve three key elements, including the Greek parliament's passing of a series of unspecified laws by Wednesday.

If these conditions are met, then talks with Europe's bailout fund can proceed, said Stubb.

Stubb refused to comment on whether Greece would get some immediate financing to help its banks reopen. "One day at a time, one step at a time," he said.


4:20 p.m.

Jeroen Dijsselbloem, the eurozone's top official, says discussions over a Greek bailout request have come a long way but that some thorny issues remain which leaders will address later at a special summit.

Following the conclusion of what turned out to be a two-day meeting of the 19 finance ministers of the eurozone, Dijsselbloem said "we've come a long way" but that "some big issues still remain."

Dijsselbloem, in his capacity as eurogroup president will brief eurozone leaders about the progress so far.

"We're now going to inform the leaders and they're going to discuss and hopefully decide on those last issues," he said, without specifying what those issues were.


4:10 p.m.

A Greek official says Prime Minister Alexis Tsipras has spoken by phone with U.S. Treasury Secretary Jack Lew, and told him that for there to be a deal, all sides must want one.

The official, who spoke on condition of anonymity in line with government regulations, said Tsipras told Lew that Greece has proven that it does want to strike a deal but that the viability of any agreement must acknowledge what the Greek people has gone through in the last five years.

The Greek economy has shrunk by around a quarter over the past few years while unemployment and poverty rates have risen alarmingly.

---By Elena Becatoros in Athens.


3:45 p.m.

German Chancellor Angela Merkel insists that there won't be a Greek deal later Sunday "at any price."

Arriving for an emergency summit of eurozone's leaders in Brussels, Merkel says "the most important currency has been lost: that is trust and reliability."

Merkel says the talks later will be "tough," adding that in any deal reached "the advantages outweigh the disadvantages both for the future of Greece and the eurozone as a whole and the principles of our cooperation."

Germany has taken a tough line on Greece over the past few weeks and has questioned whether the government of Greek Prime Minister Alexis Tsipras will deliver the reforms it has promised in exchange for a financial rescue package.


3:25 p.m.

French President Francois Hollande said he's going to do everything that he can to keep Greece in the euro.

Arriving for an emergency summit of eurozone leaders in Brussels, Hollande said "France is going to do everything to reach an agreement tonight."

He said it wasn't just Greece's future that's at stake.

"It is Europe that is at stake," he said.

Hollande also sought to douse any talk that a temporary Greek exit from the eurozone is possible. Greece is either in or out, he said.

The latter would be a retreat for Europe, said Hollande.


3:05 p.m.

Greek Prime Minister Alexis Tsipras says he's ready for a compromise deal with European creditors and that an agreement later Sunday is possible if "all parties want it."

Arriving for an emergency meeting of the 19 leaders of the eurozone in Brussels, Tsipras said Europeans want to see Europe "united and not divided."


1:10 p.m.

A European official says Greece's European creditors are seeking a deal that would relieve the pressure on the Greek banks that face an acute liquidity crunch as soon as Monday.

The official, who is close to the negotiations, said leaders from the 19-country eurozone are focused on "plan A" that involves Greece living up to its obligations and staying in the euro.

The official, who spoke on condition of anonymity because he was not authorized to speak publicly, said eurozone leaders hope to issue a statement that would pave the way for the formal for the start of Greek bailout negotiations. The leaders are due to meet later.

That, the official added, would give the "green light" to the European Central Bank to turn up the emergency liquidity assistance it provides to Greek banks.

--- By Menelaos Hadjicostis in Brussels.


12:40 p.m

The head of France's governing Socialist Party is appealing to other left-leaning parties in Europe to push for a deal to save Greece's economy.

French Socialist leader Jean-Christophe Cambadelis in particular urged Germany's Social Democrats, the junior partners in Chancellor Angela Merkel's coalition government, to push toward a compromise deal.

Cambadelis, who leads the management of President Francois Hollande's Socialist Party, said in a statement that Europeans "do not understand the German over-reaction."

France has been the staunchest ally of Greece's radical left government in recent months. It's urging a deal on the grounds that it's crucial for Greece but also for overall European unity and the Franco-German relationship that underpins it.

Germany, by contrast, has taken a far tougher stance and is urging strict conditions on any Greek bailout deal that may emerge.


12:00 p.m.

If the Greek legislators thought they had done enough by approving the tough austerity proposals of Prime Minister Alexis Tsipras, they had better think again.

Pierre Moscovici, the European Union's top economy official says the Greek government has to "do more in the short- and the mid-term."

The Greek government is coming under pressure to enact legislation swiftly, possibly within the next few days, on economic reforms to assuage concerns of creditors that it can't be trusted to deliver what it says in return for billions of euros of bailout cash.

"The deal needs to be ambitious at an economic level and realistic at a political level," Moscovici said.

The meeting of the eurozone's 19 finance ministers will be followed one of the leaders.


11:50 a.m.

Finnish Prime Minister Juha Sipila denied his government had been on the verge of collapse over disagreements on a Greek bailout among coalition members.

On Saturday, when finance ministers from across the 19-country eurozone, there were reports coming out of Finland that the government was being pressured by the Finns Party which has previously advocated a Greek exit from the euro.

"Absolutely not, no way. You're living in a world of rumors," Sipila told reporters in Helsinki on Sunday. "The government took a totally united stand."

Finland has refused to reveal its position on Greece publicly for tactical reasons.

The head of the Finns Party, Foreign Minister Timo Soini, refused to comment on the Greek question saying that the pledge of secrecy made by government members will stand.


11:20 a.m.

Greece's banks, according to many accounts, have barely enough cash in their vaults to see the country through the week.

Greece's banks have been shuttered for the best part of two weeks and daily withdrawals from ATMs have been limited to a paltry 60 euros ($67). The economy is in a freefall and the country faces big debt repayments in coming weeks.

Greece has already defaulted on a 1.6 billion euro ($1.8 billion) payment to the International Monetary Fund last month. It has another 4.2 billion-euro payment on July 20 due to the European Central Bank.

Greece has asked Europe's bailout fund for a 53.5 billion-euro 3-year financial package but many EU officials believe that won't be enough.


10:40 a.m.

Finnish Finance Minister Alexander Stubb said he was "still hopeful" for a deal on Greece's financial crisis, but the two sides were "still very, very far away."

He said in a scale of 1-to-10, Greece and its 18 partners in the eurozone were only "somewhere between 3 and 4" when it came to any agreement.

Stubb denied that Finland was blocking an agreement, saying all countries were trying to find an exit from a "very difficult situation."

Greece has asked Europe's bailout fund for a 53.5 billion-euro ($59.5 billion) 3-year financial package but many EU officials believe that won't be enough.


10:25 a.m.

European Union President Donald Tusk has decided to cancel a summit of the bloc's 28 leaders and instead center only on a summit of the 19 eurozone leaders to find a solution on Greece's bailout crisis.

In an early morning tweet, Tusk said the eurozone summit would start in mid- afternoon "and last until we conclude talks" on Greece.

A full day of talks Saturday among the 19 finance ministers hardly brought the sides closer together, with ministers still distrustful over Greece's ability to enact financial reforms


9:45 a.m.

For the Greek bailout talks to be successful, European officials say it's all about trust.

Greece will have another, possibly its last, chance Sunday to convince skeptical European creditors it can be trusted to enact wide-ranging economic reforms that would safeguard its future in the common euro currency used by 19 European nations.

The talks in Brussels resume at 11 a.m. (0900 GMT), just a few hours before the European Union's 28 leaders descend for a summit.

The two sides negotiated for eight hours Saturday where Jeroen Dijsselbloem, the eurozone's top official, says "the issue of credibility and trust was discussed."

Greece has asked Europe's bailout fund for a 53.5 billion-euro ($59.5 billion) 3-year financial package but many EU officials believe that won't be enough.


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