Eurozone leaders this evening gave Greece until next Thursday to present a detailed program. Prime Minister Joseph Muscat said this evening, at the end of the emergency summit held in Brussels, that unless an agreement is reached by Sunday, Greece could exit the Eurozone.
“The Greek PM told us that within 48 hours of the referendum he would have an agreement. In 48 hours he was unable to even come up with proposals. This point was driven home by a number of member states, including Malta,” Dr Muscat told journalists at the end of the summit.
“The Eurozone leaders said that, while the scenes of sobbing pensioners is not something we take pleasure in watching, and considering the urgency of the matter, it unacceptable for Greece to come empty handed to the summit. We have made our position clear; we will not accept any type of haircut, or debt reduction. That message was practically unanimous. The second point was that, in order to agree to any funding program from the European Stability Mechanicm (ESM) we need a clear program of prior actions – laws that need to be passed by the Greek parliament, as well as a number of reforms.”
Dr Muscat said the Eurozone leaders agreed to give the Greek government until Thursday to present a detailed program. This will then be examined by the institutions and would then be discussed at Eurozone finance minister level and, if need be, at another meeting of Eurozone leaders next Sunday. Dr Muscat said this could in turn be followed up by a full EU summit because of the impact that different scenarios could have on the 28-member bloc. A decision on urgent humanitarian aid would also have to be taken by the full council. “The last train is leaving and we need a decision by Sunday.”
Dr Muscat said Greece had accepted the timelines imposed by the eurogroup countries. If Greece respected the timeline was another matter. “There is an enormous trust deficit and we had to be hard on Greece.” Asked how confident he was that Greece would meet the Thursday deadline, Dr Muscat said he was not ‘ultra-confident’ seeing that the country had already missed a number of deadlines.
Asked how Malta’s interests (the money loaned to Greece) would be safeguarded, the Prime Minister said the EFSF would be reserving its right to reclaim its money. “We cannot keep putting money into something that is not credible.”
Dr Muscat said he would not go to Parliament to ask for another loan to Greece. “Any bailout will have to come from the ESM – which is an independent institution - and not from member countries.” The Prime Minister said he would be informing the Maltese Parliament about the latest developments and he would accept to have a debate if the need was felt.
Dr Muscat said that Greece would probably have to exit the euro area if an agreement is not reached by Sunday. European Council President Donald Tusk said this evening that this was Greece’s last chance. “The Greek referendum result strengthened the government’s position locally but changed the situation in the other member states. Now that the Greek PM has antagonized public opinion in many countries, these member states may not be willing to accept what they would have accepted a week ago. There were a number of ways and means but most of them are not off the table. If an agreement is not reached by next Sunday Greece could have to exit the Eurozone, even if the international markets are discounting this and adjusting themselves accordingly. At the end of the day it is a scenario we do not wish to see.”