Greece crisis: Talks with skeptical creditors at Brussels summit to resume Sunday

Bailout discussions between the Greek finance minister and his skeptical counterparts in the 19-country eurozone will resume Sunday after breaking up following more than eight hours of talks without any apparent breakthrough that will secure the country's future in the euro.
 
On leaving the meeting, Jeroen Dijsselbloem, the eurozone's top official, said there had been "in-depth" discussions, and highlighted the issue of "trust." 
 
The talks will resume at 11 a.m. local time, just a few hours before European leaders are meant to descend on Brussels for a summit that has been billed at various points over the past week as Greece's last chance to convince creditors that it deserves more financial help.

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Dijsselbloem said the discussions were "very difficult but work is still in progress."

Greece's finance minister, Euclid Tsakalotos, is clearly struggling to convince skeptical creditors that the Greek government can be trusted to deliver on its reform promises in exchange for a financial rescue package securing the country's future in the euro.

Pressure on Greece

The pressure has been on Greece all day even after the Greek parliament passed a harsh austerity package that it hopes will lead to a three-year bailout. Over and over, finance ministers and top officials of the eurozone said the same thing as they arrived for the key meeting in Brussels on Greece's bailout proposals — we don't fully trust you to make good on your promises.

Greece's left-wing Syriza government, they said, needed to do a lot more than just publish a 13-page plan of reform commitments before they could sign off on another multibillion-euro bailout deal that would keep the country afloat and prevent its exit from the euro.

A European official at the talks said creditors want "more specific and binding commitments" from the Greek government.

The official, who spoke on condition of anonymity because he's not authorized to talk publicly, says there's a general feeling in the room that the Greek proposals are "too little, too late" and as such, more proof of the government's commitment to follow through is required. The official said those pledges don't "necessarily have to be austerity measures."

That sentiment echoes much of the language in the run-up to the meeting.

Greece's banks have been shuttered for the better part of two weeks and daily withdrawals from ATMs have been limited to a paltry 60 euros ($84 Cdn). The economy is in freefall and the country faces a raft of big debt repayments.

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Early Saturday, Greek Prime Minister Alexis Tsipras cleared one hurdle. Lawmakers in the Greek parliament overwhelmingly backed a package of economic reforms and further austerity measures, in the hope that it will convince its European partners to back a third bailout of the country. Greece has made a request to Europe's bailout fund for a 53.5 billion-euro ($75.5 billion Cdn) three-year financial package.

Germany takes hard line

Still, the measures proposed, which include changes long demanded by creditors, such as changes to pensions and sales taxes, don't appear to be enough, just yet. Following months of deteriorating relations, creditors are demanding firm legislative action to back up the proposals.

Earlier, German Finance Minister Wolfgang Schaeuble, who has taken a hard line on Greece over recent months, said the Greek government will have to do a lot more than just say it wants to reform if it's going to get more money.

"We will definitely not be able to rely on promises," he said. "We are determined to not make calculations that everyone knows one cannot believe in."

Schaeuble was clear in who he blamed for current crisis. He put that firmly on the shoulders of the radical left Syriza government that was elected in January on an anti-austerity prescription. The "hopeful" economic situation regarding Greece at the end of last year has been "destroyed by the last months," said Schaeuble who anticipated an "extraordinarily difficult" meeting.

The German finance minister was at the center of a report in Germany's Frankfurter Allgemeine Sonntagszeitung that he has proposed a temporary, five-year euro exit for Greece as a way out of the crisis. However, Theodoros Mihopoulos who heads Greek Prime Minister Alexis Tsipras' office, said in a tweet that the report "is completely denied."

Finland is perhaps taking the hardest line of all. Reports out of the country said the coalition government was balking at further assistance for Greece.

The eurozone ministers have to give their blessing to Greece's bailout request to the European Stability Mechanism. Traditionally, eurozone ministers agree by mutual consensus. The task facing the new Greek finance minister, Euclid Tsakalotos, is to convince his skeptical counterparts that Greece deserves another bailout, which would be its third in five years.