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“Athens closed the door,” says Gramegna
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“Athens closed the door,” says Gramegna

3 min. 28.06.2015 From our online archive
Luxembourg Finance Minister Pierre Gramegna late on Saturday commented that Athens had “closed the door” on further negotiations, after it was announced that Greece's bailout programme would not be extended.

(CS/dv/AFP) Luxembourg Finance Minister Pierre Gramegna late on Saturday commented that Athens had “closed the door” on further negotiations, after it was announced that Greece's bailout programme would not be extended.

The Eurogroup on Saturday evening announced that the bailout programme would expire as planned on June 30, the same day a 1.5 billion euros payment is due to the International Monetary Fund, after Prime Minister Alexis Tsipras has announced a referendum on reform plans.

Greece had rejected the latest proposals by creditors – a five-month, 12-billion-euro extension of its rescue programme, on condition it committed to fresh reforms – at the end of a week of intense negotiations.

The Syriza party has repeatedly refused to make cuts to pensions and changes to the VAT system demanded by Greece's debtors – the "troika" of the European Commission, European Central Bank and International Monetary Fund.

Luxembourg Finance Minister Pierre Gramegna spoke of a breach of trust between Greece and the other 18 eurozone members. The spontaneous announcement of a referendum had taken place without prior consultation. This had led to a decision to make “no further efforts.”

“At the moment nothing is on the table,” Gramegna commented Saturday. “Negotiations have been broken off. Athens closed the door.” The Finance Minister said that the only way out of this cul-de-sac was for government in Athens to change its position – an unlikely event. “Theoretically imaginable, practically hardly possible,” Gramegna commented.

Greece part of Europe and the eurozone

The minister however also emphasised that Luxembourg had always been one of the countries with the goal to keep Greece in the euro. “Sadly this has failed, because Greece took measures making negotiations impossible.”

While arguing that a so-called Grexit is no longer a taboo subject, Gramegna also said that Greece is still part of the eurozone, with the EU better equipped today to cope with a Greek default than before.

“We need to keep an eye on it in the coming days,” Gramegna said about the threat of the country having to leave the joint currency.

Germany and France also insisted that Greece would remain inside the 19-country eurozone, as fears grew about the future of the single currency. "Greece remains a member of the eurozone and Greece remains part of Europe," said Germany's Finance Minister Wolfgang Schäuble, while his French counterpart Michel Sapin said Greece's "destiny" was in the euro.

Varoufakis left out of Eurogroup talks

Eurogroup ministers later met without Greece to discuss the "consequences" of a possible "Grexit" and to insist they would "preserve the integrity and stability of the euro area" its president Jeroen Dijsselbloem said.

"We will do everything to fight against any possible danger of contagion," added Schaeuble in an attempt to calm global markets before they open on Monday.

Frozen out of the talks, Greek Finance Minister Yanis Varoufakis left saying: "It's a sad day for Europe, but we will overcome it." But he added that the refusal to grant his request to extend the bailout "will certainly damage the credibility for the Eurogroup as a democratic union and I am very much afraid the damage will be permanent."

ECB schedules emergency meeting

The European Central Bank was set to hold an emergency meeting Sunday amid mounting fears Greece's banks will be unable to open next week, as the debt-stricken country hurtled closer towards a possible exit from the eurozone.

The ECB is expected to play a critical role in ensuring Greek banks have the cash to open, after long queues formed at cash machines across the country at the weekend on fears capital controls would be introduced in the face of Athens' looming default on a huge IMF repayment.

Parliamentarians late Saturday voted in favour of the referendum - a shock announcement by radical leader Tsipras after his government rejected the latest debt deal - saying it involved further austerity measures that would cause "humiliation" to the Greek people.

The referendum on July 5 will ask Greeks to say "yes" or "no" to the measures submitted by creditors to Athens on Friday at one of the final rounds of negotiations. 

In a speech before parliament's vote, Tsipras said he was confident "the Greek people will say an emphatic no to the ultimatum" by the country's EU-IMF creditors, but "a big yes to European solidarity."

Greece's negotiations with its international creditors have dragged on since January, when Tsipras's Syriza party first took power on a promise of ending austerity measures demanded by the EU and IMF in return for two bailouts worth 240 billion euros.