Greek, other euro leaders agreed for new round of talks

Jul 7, 2015

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In:Greece

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Backed by Greek voters and opposition leaders, Prime Minister Alex Tsipras meets Tuesday with other eurozone leaders to see it they can resurrect debt relief negotiations.

Following Sunday’s referendum in which 61% of voters rejected stringent bailout terms set by Greece’s international creditors, Tsipras hoped to go to the meeting in Brussels with a strenghtened hand. On

Banks have been closed for a week, with strict limits on daily ATM withdrawals, and are expected to stay shut at least through mid-week.

Monday, Greek party leaders rallied around his call for new talks.  However, the lenders gave no immediate indication they were ready to compromise on new loans to keep Greece afloat.

German Chancellor Angela Merkel, who on Monday talked with Tsipras and met with French President Francois Hollande in Paris, stressed that Greece needs to take “responsibility” for reforming its economy. Hollande said Europe needs to show “solidarity” with Greece. The two leaders run the eurozone’s largest economies.

Both leaders also said they respect the referendum results, and the door remains open to negotiations to find a way to keep Greece in the 19-country eurozone.

As the outlook for the talks remain unclear, the European Central Bank decided Monday to leave the level of emergency credit to Greek banks unchanged to prevent their collapse. But it raised its collateral requirements.

In one concession to the creditors, Tsipras replaced his outspoken finance minister, Yanis Varoufakis, who had alienated eurozone leaders by assailing the onerous terms they demanded for new loans.”I shall wear the creditors’ loathing with pride,” Varoufakis said in a defiant but characteristically colorful announcement about his resignation on his blog.

He said he was resigning because Tsipras believed his departure might help pave the way for Greece to “achieve a deal.”

The Greek government later named lower-keyed economist Euclid Tsakalotos, 55, as the new finance minister. He was the prime minister’s lead bailout negotiator in talks that halted last month before Tsipras called the referendum.

IMF chief Christine Lagarde said Monday that the fund is “ready to assist Greece if requested to do so. “We are monitoring the situation closely,” she said, without offering further details.

In a statement Monday, European Commission Vice President Valdis Dombrovskis said: “The ‘no’ result unfortunately widens the gap between Greece and other eurozone countries. There is no easy way out of this crisis. Too much time and too many opportunities have been lost.”

He said the commission is ready to work with Greece but cannot negotiate a new program without a mandate from eurozone finance ministers.

Major stock benchmarks in Asia, Europe and on Wall Street all moved lower Monday.