French President François Hollande described Greece’s new reform proposals as “serious and credible” Friday but Germany, which unlike France was not directly involved in drawing up the last-minute rescue plan, remained deeply skeptical.
“The Greek government just showed a willingness to stay in the eurozone. The program is serious and credible,” said Hollande, whose Socialist government has long been more inclined to give Athens leeway than Angela Merkel’s German conservatives and their fiscally-conservative allies in much of northern Europe.
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Michael Fuchs, a senior German lawmaker from the chancellor’s Christian Democrats, told BBC radio that he had “a little bit of a problem to trust” any proposal from Greece, which roundly rejected German-prescribed austerity in last weekend’s referendum. The CDU’s Bavarian sister party, the CSU, has been and remains much more inclined to push for a “Grexit” from the eurozone.
Greece’s creditors began studying Friday whether Prime Minister Alexis Tsipras’ new plan meets the terms of an ultimatum issued at a tense crisis summit earlier this week. The demand was to make credible reform proposals by midnight Thursday — or risk ejection from the 19-country eurozone at a specially-convened summit Sunday.
The European Commission, European Central Bank, International Monetary Fund and the head of the Eurogroup, which brings together eurozone finance ministers, were due to discuss the new proposals by telephone at 1 p.m. Friday, while Tsipras was due to submit the new package to the Greek parliament for approval later in the day.
Greece is now proposing €13 billion worth of spending cuts and revenue measures in exchange for a third three-year bailout that would be worth €53.5 billion. Greece’s first two bailouts were worth about €240 billion but there is little to show for it, with Greek banks teetering on the brink of collapse, the economy starved of cash and the EU discussing the need for humanitarian assistance.
Tsipras will be hoping that growing international support for debt relief for Greece — which now includes the International Monetary Fund and U.S. Treasury Secretary Jack Lew, but crucially not Berlin — plus a popular mandate from last Sunday’s referendum, will reinforce his negotiating position vis-à-vis Greek lawmakers and international creditors.
If the third bailout program passes muster when studied by Eurogroup ministers on Saturday, then it might not be necessary to hold a summit of all 28 EU member states Sunday, according to media reports citing Italian Prime Minister Matteo Renzi and unnamed EU officials. A full summit would be necessary if a Grexit from the currency union were to be discussed.