Greek debt crisis: Eurozone ministers want Greece to offer more - live updates / The Guardian

The Guardian

A quick recap.... Eurozone ministers have been discussing Greece’s bailout request for hours, with no signs of an major BREAKTHROUGH . The meeting may end soon, though, after around six hours which began with smiles, and frowns. EU sources say that creditors are demanding tougher measures, on top of the €13bn plan of tax rises, pension reforms and spending cuts already OFFERED. Several countries have already questioned whether Greece has done enough, and warned that trust in the Greek government has been badly hit by the last few weeks’ events. Germany has reportedly drawn up a paper suggesting Greece could temporarily EXIT  the eurozone, to general disbelief.

And Finnish TV is reporting that the Helsinki government will not support a new Greek aid package, with reports suggesting its coalition could break up over Greece. It could all be bargaining TACTICS , though, ahead of tomorrow’s leaders summits. Economists have warned that Greece needs a deal urgently, so that its banking sector can be replenished with desperately needed LIQUIDITY. And in Athens, a senior government minister has suggested thatSyriza MPs who can’t support the austerity plan should quit.

Finland taking tough line over Grexit - reports

The Greek crisis is putting serious strain on Finland’s new government.

Maria Stenroos, EU correspondent for state broadcaster Yle, reports that the Finnish delegation is taking an even tougher line than Germany.

Creditors drawing up extra demands on Greece

Greece’s CREDITORS are drafting a response to Athen’s bailout proposal - outlining what extra measures are needed, reports our Europe editor: Ian also hears that eurozone ministers may fail to reach an agreement tonight - kicking the can upstairs to the EURO  leaders meeting tomorrow.

Wolfango Piccoli, analyst at Teneo Intelligence, reckons that Alexis Tsipras has four OPTIONS  following the mini-rebellion at last night’s vote over his reform plan:

• He could resign and trigger snap polls after reaching a deal with hisLENDERS . This would leave Greece in limbo for around 3-4 weeks, a development that would raise significant concerns among the lenders and complicate meeting the relevant targets (milestones) attached to the likely sub-tranches of a new bailout.

• He could decide to tackle decisively the situation by breaking with the dissenters and replacing those MPs who voted “No” or abstained, including the two ministers and the parliament speaker. This could be achieved by enforcing SYRIZA’s internal rule forcing (on paper) MPs to give up their seats after leaving the parliamentaryGROUP .

• He could seek to enlarge the governing coalition by including one or more of theOPPOSITION  parties, notably POTAMI and Pasok. The creation of a wider coalition would reassure the lenders but it is, in our view, the least likely of the available options.

• Finally, he could decide to move cautiously (as he has done in the past) by replacing only the two MPs who voted “No”, meaning that an unstable balance would prevail in the short-term, at least.

But whatever Tsipras chooses, there’s a highCHANCE  of another general election this year, Wolf adds.

Although there is growing optimism in Athens, there is also fear for the future after weeks of unsettling drama, as Helena Smith reports:

I just chatted with Vicky Pryce, the prominent economist. She says she has been taken aback not only by the yearning for normality she has encountered since arriving in Athens but the sheer level of anxiety she has also seen.

“Everyone wantsTHE BANKS  to reopen so that some normality can return and businesses can re-open,” she told me.

“People are really very, very, fearful, a lot have been telling me they have been having PANIC ATTACKS  because of the anxiety that this situation has produced. No one wants to even go to the beach [in the southern suburbs]. When I asked why, I was told they are all at home guarding their money!”

There were mass withdrawals of savings by Greeks fearing the collapse ofTHE BANKING  system, before capital controls were imposed nearly two weeks ago.

Pryce, who has OPENLY  opposed the tough austerity measures being asked of Athens, said it was now crucial that an agreement was reached with the country’s creditors.

“It’s going to be very painful but we are where we are and right now so very much hangs on signing it,” she said.

“If Greece gets this bailout it will not only bring LIQUIDITY  into the system but open the possibility of the country entering the quantitative easing scheme [set up] by the European Central Bankwhich would then allow rates to come down in the CAPITAL MARKETS .

That would be terribly, terribly important in helping to turn things around.”