IMF ready to help Greece if asked
06 July 2015, 18:58
Athens - The latest on the fallout from the Greek referendum (all times local):
Christine Lagarde, managing director of the International Monetary Fund, says the fund stands "ready to assist Greece if requested to do so."
Her statement Monday was the IMF's first reaction to Greek voters' decisive rejection of further austerity measures in return for bailout loans.
"We are monitoring the situation closely," she said, without offering further details.
Greece is in arrears to the IMF, having failed to pay a 1.5 billion-euro ($1.7 billion) loan due last Tuesday. The IMF said it couldn't get involved in a further bailout of Greece if the country remained in arrears.
The IMF last week also said that Greece would need debt relief as well as new financing worth more than 60 billion euros through 2018 to avoid financial collapse.
On the streets of Athens, Greeks are proud of their toughness and defiance after Sunday's landslide "no" vote against creditors' demands — but they acknowledge there's still plenty to worry about.
George Papadokostakis, a 34-year-old coffee shop owner, says he's very happy with the referendum result. He says "something happened last night with the Greek people. ... we were in a dead-end situation (but) with the 'no' vote we believe there may be something better."
Shoe store worker Nicky Zachary thinks Greeks are tough and united in rejecting austerity.
She says "we can live with very little and we can live through difficult situations. And I think after the referendum, the Greek people are united."
"I don't know what will happen next. I would like to have an answer. But at least we are fighting," she added.
Greece's defense minister says three opposition parties have signed a declaration backing Prime Minister Alexis Tsipras in bailout negotiations with creditors.
That makes a total of five parties behind the prime minister, who already had the support of his own Syriza party and the junior party in the governing coalition, the Independent Greeks.
Defense Minister Panos Kammenos said the support heralded a "new era" in Greek politics and would boost Athens' chances of reaching a deal with European and international creditors.
Tsipras convened a meeting of party leaders on Monday, a day after winning a bailout referendum that rejected creditors' previous demands and hours after his finance minister, Yanis Varoufakis, resigned.
Greek Prime Minister Alexis Tsipras has spoken on the telephone with German Chancellor Angela Merkel, a day after Greece overwhelmingly voted against recent creditor proposals and on the eve of an emergency eurozone leaders' summit.
A government official in Athens said Tsipras told Merkel that he would present Greece's proposals to restart talks with creditors at the Brussels meetings.
The official asked not to be named pending an official announcement.
Talks between Athens and bailout lenders were halted during the referendum campaign.
Eurozone member Slovenia expects Greece to table a new "sincere" bailout plan to European creditors that would be acceptable to both sides.
Slovenia's Prime Minister Miro Cerar said Greece should make fresh proposals at the summit of the eurozone's 19 leaders on Tuesday. The proposals, he added, should be bolstered by "a convincing plan of structural reforms."
Cerar, who will attend the meeting, says "any attempt by the Greek government that does not have a sincere and constructive intention to reach an agreement ... is unacceptable for the government of Slovenia."
Germany's vice chancellor says Europe needs to be ready to provide humanitarian aid to Greece
Sigmar Gabriel, who is also Germany's economy minister, said there is a danger that Greece will suffer a shortage of essential goods such as medicine.
"The people there need help, and we shouldn't deny it to them just because we're not satisfied with the outcome of the referendum," Gabriel told reporters in Berlin.
He echoed earlier statements from across Europe that it's up to the Greek government to make a new bailout proposal.
Greece's economy minister says the European Central Bank should keep Greek banks alive so talks can push ahead with creditors.
Giorgos Stathakis told the BBC that even if the ECB continues to freeze Emergency Liquidity Assistance, current cash withdrawal and transfer restrictions could stay in place until Friday without any collapse. He said the best-case scenario would be an additional 3 billion euros ($3.3 billion) in liquidity assistance.
But he insists the government wants Greece to stay in the euro.
"That's definite. That has been the slogan before the referendum," he told the BBC. "We want to stay in the euro. We want a better deal. A more balanced deal."
Capital controls were imposed last week in the wake of the failure of the country to forge a new deal with creditors.
The Kremlin says Russian President Vladimir Putin received a phone call from Greek Prime Minister Alexis Tsipras, whose government is racing against the clock to reach a bailout deal with creditors.
The two leaders discussed the results of Sunday's referendum in Greece and "several questions about the further development of Russian-Greek cooperation," the Kremlin said.
During Monday's call, the Kremlin said Putin "expressed support for the Greek people in overcoming the difficulties facing their country."
The head of VTB, Russia's second-largest state bank, said over the weekend that Russia might be interested in buying Greek assets if they were to be privatized but that direct loans to Greece were unlikely.
The eurozone's top official says he wants Greece to stay in the euro.
Jeroen Dijsselbloem, who is also the Dutch finance minister, also says the Greeks want the same.
"That is their goal, and still mine," he said on his way into a Dutch Cabinet meeting Monday in The Hague. "But we will have to see if it happens."
Asked if it was still worth talking with the Greeks after the referendum, Dijsselbloem said: "We will see. We are going to see in the coming days if there are still openings. But there are no easy solutions."
Dijsselbloem added tough measures are still necessary in Greece. "And if the government and population reject tough measures then we get to a very difficult place," he said.
The Greek referendum result is giving heart to anti-austerity parties in other countries.
Portugal's main opposition Socialist Party, which will bid for power in elections due in three months' time, says Greece's troubles show that a new approach is needed to the eurozone's financial difficulties.
Socialist leader Antonio Costa said austerity policies are "wrong" and endanger European unity. A new focus on growth is needed to rid the eurozone of the deep economic differences between its 19 members, he said.
Like Greece, Portugal got a bailout, when it asked for 78 billion ($86 billion) in 2011. Spending cuts and tax hikes have reduced its budget deficit but have increased unemployment and reduced living standards.
Portugal's center-right coalition government, which has staked its reputation on austerity policies to reduce the country's huge debt burden, made no comment.
European Commission Vice-President Valdis Dombrovskis says Greece's 'no' vote "unfortunately widens the gap between Greece and other eurozone countries.
Dombrovskis, who is the executive branch's top official for the euro, said authorities are "able and willing to defend the financial stability" in the eurozone if it proves necessary in the aftermath of the referendum result.
"We have all the tools necessary to ensure the financial stability of the euro area," Dombrovskis told reporters in Brussels.
He noted that the market reactions "have been quite limited outside the situation on Greece."
The German Finance Ministry says a reduction in Greece's debt mountain isn't on Germany's agenda.
Ministry spokesman Martin Jaeger said "our position is well-known ... a debt cut is not an issue for us."
He said there were no grounds for a debt restructuring given that Greece has yet to set out fresh proposals for financial aid.
Last week, the International Monetary Fund, which has been a major creditor of Greece over the past five years, suggested that debt relief for Greece is necessary.
Jaeger says Europe decided that economic reforms coupled with aid was a better route to a sustainable future for Greece, adding that it was working well in the country, until the end of last year.
German officials are insisting that Greece can only hope to receive aid from the eurozone's rescue fund if it accepts conditions in return.
Finance Ministry spokesman Martin Jaeger said Monday the rules underpinning the fund, the European Stability Mechanism, clearly specify that all aid is subject to conditions.
He said that "it is simply not legally possible to back away from this principle."
Chancellor Angela Merkel's spokesman, Steffen Seibert, echoed that sentiment: "We are stressing the principle that solidarity is inseparable from (a country's) own efforts, and we see that this principle has brought significant success in the past few years."
Seibert says Germany will see what proposals Greece makes to its European partners.
Spanish Economy Minister Luis de Guindos said his government is ready to talk about a third Greek bailout.
De Guindos told reporters in Madrid after the government's economic team met to discuss Greece's referendum result that everyone wants Greece to "stay in the euro."
However, he said "the rules for the euro remain the same as they were two days ago."
"I don't contemplate in any way Greece leaving the euro," he said.
The minister conceded the situation now was probably the most complex since the euro launched in 1999 but that the currency's irreversibility would be reaffirmed Tuesday at the meeting of eurozone finance ministers.
Chancellor Angela Merkel's spokesman says Germany sees no basis at present for entering negotiations on a new bailout program for Greece, but that the door remains open.
Steffen Seibert said Monday that Germany respects the "clear 'no' vote" by Greeks against austerity measures demanded by creditors and that "the door for talks always remains open."
However, he said the conditions are "not there at present to enter negotiations on a new program." He said the "no" vote is a vote against the principle — still supported by Germany — that solidarity requires countries to take responsibility.
Seibert says Europe will explore what possibilities there are to help Greek citizens and "a lot will depend on what proposals the Greek government now puts on the table."
French Finance Minister Michel Sapin said discussions over Greece's debt sustainability are not "taboo" and that the country could not recover given its current repayment obligations "in the months and years to come."
He also called for the European Central Bank to maintain liquidity assistance to Greek banks. French and German leaders are meeting late Monday for a "deep conversation" leading to a solution, Sapin told Europe 1 radio.
France has through the last few months been one of the most conciliatory eurozone countries towards Greece.
In a report last week, the International Monetary Fund said Greece would need debt relief as well as new financing worth more than 60 billion euros through 2018 to avoid financial collapse.
Greece's employment minister is signaling a conciliatory tone in upcoming talks with European leaders, suggesting that leaving the eurozone would be the worst possible option for the beleaguered country.
Rania Antonopoulos told the BBC there is still time to get a deal. With Greece's future hanging in the balance, the country is running out of cash and is at risk of a financial crash.
"There are still 48 hours, there is still this week," said Antonopoulos. "We will push as much as possible for an outcome, a result of these negotiations that does not obligate Greece to go in that direction."
Cyprus says it has been the only bailed-out country in the 19-country eurozone to support Greece's demand for restructuring its massive debt.
Government spokesman Nicos Christodoulides has told state radio that Cyprus' president and finance minister backed a restructuring of Greek debt and negotiations between Greece and its creditors need to begin immediately.
Cypriot Finance Minister Harris Georgiades said last week that the country could consider writing off 330 million euros ($370 million) in rescue loans to Greece if other eurozone countries agreed on a deal to lighten the country's debt load.
Cyprus became the fourth eurozone country to be bailed out in 2013 following Greece, Ireland and Portugal.
Finland's finance minister says Greece will need to conduct extensive reforms no matter what happens next and says "the ball is now in Greece's court."
Alexander Stubb said on his website that's it up to the Greek government to decide what Sunday's referendum vote against creditors' previous proposals means in practice. He stressed that "the instruments and rules for the stabilization of the eurozone remain unchanged."
Stubb says the near future will be very difficult for Greece and mending the economy will require extensive reforms.
He added that "negotiations can only be resumed when the Greek government is willing to cooperate and commit itself to measures to stabilize the country's public economy and implement the structural reforms required for debt sustainability."
European stock markets trimmed earlier losses after Greek Finance Minister Yanis Varoufakis said he was quitting his post despite the overwhelming 'no' vote in the country's referendum on creditor proposals on Sunday.
After opening sharply lower, European stock markets recovered some ground on the news. The Stoxx 50 index of leading European shares was down 1.6 percent while Germany's DAX fell 1.2 percent.
Over months of negotiations, Varoufakis' relations with his peers in the 19-country eurozone had clearly deteriorated. Traders say his resignation may offer a glimmer of hope of easing negotiations between the Greek government and its creditors.
French Finance Minister Michel Sapin says it is up to Greece to come up with new proposals following the referendum, hours before German Chancellor Angela Merkel heads to Paris for an emergency meeting with French President Francois Hollande.
"The basis of a dialogue is on the table, but it's up to Greece to show us that it takes the dialogue seriously and that it knows it can stay in the euro and that there are decisions to make," Sapin told Europe 1 radio Monday.
France had no desire to see Greece leave Europe but Sapin insisted that the bloc would not be destabilized if that happened. "It's Greece that is in difficulty. Europe is not in difficulty — Europe is facing a Greek difficulty."
A meeting between Greek Prime Minister Alexis Tsipras and the leaders of six of the seven parties represented in Parliament is underway at the presidential palace.
Tsipras requested Monday's meeting shortly after the austerity referendum results showed a clear victory for the "no" camp. He said he aimed to share his strategy for negotiations with creditors on a new bailout deal and call for support.
Government spokesman Gabriel Sakellaridis said in a statement that a replacement for Finance Minister Yanis Varoufakis, who resigned Monday, would be announced later in the day after a meeting of political party leaders.
Sakellaridis said Prime Minister Alexis Tsipras "feels the need to thank (Varoufakis) for his ceaseless efforts to promote the government's positions and the interests of the Greek people, under very difficult conditions."
Greek Finance Minister Yanis Varoufakis has resigned, saying he was told shortly after the Greek referendum result that the some eurozone finance ministers and Greece's other creditors would prefer he not attend the ministers' meetings.
Varoufakis issued an announcement Monday saying Prime Minister Alexis Tsipras had judged that Varoufakis' resignation "might help achieve a deal" and that he was leaving the finance ministry for this reason.
Varoufakis is known for his brash style and fondness for frequent media appearances when the new government was formed in January. He had visibly annoyed many of the eurozone's finance ministers during Greece's debt negotiations.
He said it's crucial there is a "proper resolution" involving debt restructuring immediately.
He said the prime minister had judged it "potentially helpful to him" if he is absent from the upcoming meetings with Greece's creditors.
"I shall wear the creditors' loathing with pride," he said, adding that he fully supports the prime minister and the government.
The final results of Greece's bailout referendum are in, with all 19,159 precincts reporting. The "No" side won with a higher than expected 61.31 percent, while "Yes" got 38.69 percent.
A total of 6.16 million Greeks voted in Sunday's referendum, or 62.5 percent of eligible voters. The poll needed a minimum 40 percent turnout to be valid.
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