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Last chance for Greece

Greek Prime Minister Alexis Tsipras is today expected to make a last-minute attempt to re-open bailout negotiations with his country’s European creditors.

Facing an emergency eurozone summit, he is expected to put forward new bailout proposals after an overwhelming 61% of the Greek public rejected the terms of the last EU bailout offer.

Tsipras is under pressure from his 18 eurozone partners and from the Greek public alike. The majority of eurozone leaders are now pressing for a hard line against Greece’s left-wing Syriza government, arguing that they too are leading democratic countries and that Greece’s No vote in the referendum cannot justify more lenient terms for Greece. The Greek public, on the other hand, is pushing Tsispras and his party to fulfill their commitment to keep Greece in the Euro without adopting further austerity measures.

Tsipras has taken some steps to soften his negotiating style, pushing his outspoken finance minister Yanis Varoufakis to resign yesterday, as this might be “potentially helpful to him in reaching an agreement”. He has replaced him with the soft-talking negotiator Euclid Tsakalotos.

Speaking at a joint media conference with German Chancellor Angela Merkel, French President Francois Hollande has said: “the door is open to negotiations, but there isn’t much time left and the situation is urgent both for Greece and for Europe.”

Despite pressure from many in Germany, Merkel has also expressed a willingness re-enter negotiations if Tsipras can bring convincing new propositions to the table. German finance minister Wolfgang Schaeuble has been prominent amongst those calling for Greece to break away from the eurozone. German Vice Chancellor Sigmar Gabriel has today also called it “naive” to have let Greece into the Euro to begin with.

Greece’s banks and stock exchange have been closed since the imposition of capital controls on the country on June 29th. The public has been limited to withdrawing €60 a day, and the country has already run out of €20 notes. If a new bailout deal is not reached and the country runs out of money, it will be forced to leave the Euro. There are widespread fears this could cause a domino-effect in other eurozone countries.

Tristan Grove

 

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