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 Fear of financial chaos have seen savers taking their cash out of
Greek banks. Banking sources said this was the reason the European
Central Bank offered more emergency funding for Greek banks on
Thursday until after crunch talks among euro zone finance ministers
on Monday.
Greek markets rose strongly after new prime minister Alexis Tsipras,
elected on a promise to scrap a bailout deal he says has
impoverished millions, agreed to have aides sit down with officials
from the European Union, European Central Bank and the International
Monetary Fund - commonly known as the "troika".
However, the Dutch finance minister, who will chair a meeting on
Monday of euro zone colleagues, continued to play down the chances
of a rapid conclusion to negotiations on Monday. "I’m really still
very pessimistic about that now," Jeroen Dijsselbloem said.
"Greeks' expectations of the Greek government are sky high," he
added. "But the possibilities, given the state of their economy, are
very limited. So that still needs a huge adjustment and I don’t know
if we can figure that out as soon as Monday."
A spokesman for Tsipras, who had accepted Dijsselbloem's offer of
the technical talks during a first encounter with fellow EU leaders
at a Brussels summit on Thursday, said: "We will do whatever we can
so that a deal is found on Monday."
On Wednesday, euro zone finance ministers failed even to agree a
broad common statement on how to maintain funding for Greece
following the expiry at the end of this month of the three-year-old
bailout package - hated by many Greeks along with the troika that
has enforced its terms.
Tsipras wants a new financial package, freed of unpopular
terminology and the most burdensome conditions. But Germany, backed
solidly so far by the other 17 euro zone states, insists his
government should extend the current terms for some months, giving
it time to develop a new strategy if it wishes.
Greek spokesman Gabriel Sakellaridis also said that if euro zone
finance ministers failed to get a deal in Brussels on Monday
evening, that would not be catastrophic. That view is not entirely
shared in some other European capitals, especially those like Berlin
and Helsinki where any deal with Greece will need to be ratified by
local parliaments.
"DOWN TO HARD FACTS"
Friday's talks in Brussels, which could continue through to Monday,
aim to identify which elements of the bailout are compatible with
what Tsipras says he was elected to carry out. EU leaders say Greece
is free to propose other ways of managing its budget and huge debts,
but that these must give creditors - mostly other EU states -
credible prospects of being repaid.
"There have been very good political debates ... and now we need to
get down to the hard facts," a senior EU official close to the talks
said of the efforts to identify areas of agreement and divergence
between the creditors' scheme and the government.
"On Monday, we expect a description of what are the overlaps ... and
what are the divergences," the official said.
Pierre Moscovici, the former French finance minister who now runs
economic affairs for the European Commission, said he was
"optimistic" about a deal next week and warned against a failure
that many fear would bring unpredictable disruption to Europe.
He said Tsipras "must respect promises and at the same time we are
ready, we Europeans, to see what margins of maneuver are possible."
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Greek spokesman Sakellaridis insisted, however, that Athens remains
opposed to implementing reforms that intensify austerity cuts and
weaken the social fabric.
In a reminder of the gulf of ideology lying behind the hard finance
of the negotiating table, Greek Finance Minister Yanis Varoufakis, a
fast-talking academic economist, told German news magazine Der
Spiegel that writing off some debt - a "haircut" would be cheaper
for Athens' creditors. Such a move is anathema to other governments,
especially in Berlin.
Underlining how the crisis touches deep historical emotions across
Europe, a spokesman for German Finance Minister Wolfgang Schaeuble
condemned a cartoon in a newspaper close to Tsipras. Showing
Schaeuble in a Nazi uniform, it evoked the Holocaust by having him
saying to Greeks: "We insist on soap from your fat."
MARKETS BOUNCE
Athens' ATG <.ATG> equity index rose more than 5 percent, pulled up
by banks: "The problem appears to be in the semantics of any
agreement, so that both Germany and Greece don't lose face," said
Toscafund analyst Takis Christodoulopoulos. "But you would have
thought the lawyers would be able to sort this out."
At Thursday's EU meeting, Tsipras presented his views to fellow
leaders but summit chairman Donald Tusk ruled out debate on the debt
crisis, saying presidents and prime ministers did not want to meddle
in talks run by the Eurogroup of finance ministers.
The 40-year-old novice premier found no meeting of minds around the
table, people in the room told Reuters.
He scored points by making his first intervention to counter
concerns that he might veto EU efforts to maintain economic
sanctions on Russia over Ukraine. But his speech on the need to end
austerity in Greece, while delivered in polite tones, failed to
impress fellow leaders.
German Chancellor Angela Merkel, vilified by the Greek left as
Europe's "austerity queen", said Berlin was ready for a compromise:
"However, it must also be said that Europe's credibility naturally
depends on us respecting rules and being reliable with each other,"
she said.
Support among Germans for Greece staying in the euro zone has grown
over the past three years despite the new government in Athens
rejecting the bailout, a poll for German television ARD showed on
Friday.
(Editing by Peter Graff)
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