Greece’s newly installed finance minister arrived in Brussels at a crucial meeting of his eurozone peers Tuesday without the new bailout proposal the group had expected to receive.
The apparent setback — another day with no specificity from Athens — might do little to convince Greece’s many critics in the eurozone that there is any hope of salvaging debt negotiations that broke off nearly two weeks ago, just before Prime Minister Alexis Tsipras of Greece called for a public referendum on the issue.
Instead of presenting a specific proposal Tuesday for how Greece might receive new financial aid from the other eurozone countries in return for changes in taxing, spending or parts of the economy, the Greek official, Euclid Tsakalotos, told a gathering of eurozone finance ministers that Athens was to send a letter Tuesday requesting a new bailout program.
Some of the finance ministers expressed their frustration at what they considered a further delay by Greece, according to a person with direct knowledge of the meeting who spoke on the condition of anonymity because of the sensitivity of the proceedings.
The lack of progress in the afternoon meeting of the Eurogroup of finance ministers did not bode well for an evening summit of eurozone leaders who were gathering in Brussles, also to discuss Greece.
Chancellor Angela Merkel of Germany was not optimistic as she arrived for the summit Tuesday evening, saying there was no basis for negotiations after the Greek vote Sunday.
The head of the Eurogroup, Jeroen Dijsselbloem, said the finance ministers would reconvene Wednesday by teleconference to discuss the plan Greece submits.
“There were no new proposals at this point from the Greek minister,” Dijsselbloem told journalists after the Eurogroup meeting.
Dijsselbloem, his voice slightly hoarse, said he now expects a new letter from the Athens government requesting fresh support for Greece from the European bailout fund, the European Stability Mechanism.
Dijsselbloem said the institutions that oversee Greece’s compliance with the terms of its previous bailouts would, as a first step, be asked to examine the proposals. After the institutions give their opinion, “we will see whether we can formally start the negotiations,” Dijsselbloem said. “All this has to be done in a matter of days and we have very little time, as you are all aware.”
Going into the meeting, Dijsselbloem had been much more upbeat. But like other European officials who said they were willing to listen to the latest Greek bailout proposal, Dijsselbloem had indicated that the onus was on Athens to offer something new and specific.
“It’s going to be very difficult, but we will await new proposals from the Greek government,” Dijsselbloem said before the meeting of 19 finance ministers.
After the referendum, held Sunday, in which a previous eurozone bailout offer was rejected over its austerity demands, Greece is trying to reach a new arrangement as the government and banks are quickly running out of money. Because its previous international bailout program expired before Athens could receive a loan payout of 7.2 billion euros (about $7.9 billion), the negotiations for any new aid program are essentially starting from scratch.
That is why even as Dijsselbloem and other European officials — including Prime Minister Manuel Valls of France and the European Commission president, Jean-Claude Juncker — on Tuesday said they were willing to listen to what the Greek government had to say, they tended to express friendly skepticism.
“Now is the time to get around the table again,” Juncker said in a statement to the European Parliament in Strasbourg, France, alluding to Greece.
“In Europe, there are no simple answers,” he said. “Europe is all about compromise, and this takes time.”
But time is what Greece does not have.
And some of the eurozone finance ministers were openly hostile to the idea of reopening negotiations.
Peter Kazimir, the Slovak finance minister, told reporters before the meeting that “prolonging these debates and discussions would be detrimental to Greece and to the eurozone as a whole.” He said a near-term promise of debt relief, a central demand by Athens, was a “red line” and “absolutely impossible.”
The German finance minister, Wolfgang Schauble, long the most outspoken skeptic of Greece’s ability to come up with a workable plan, also rejected the suggestion of debt reduction for Greece, saying it was not allowed under European regulations. As he headed into the meeting, Schauble insisted that without a new agreement there would be no financial assistance for Greece, which “fought successfully to reject” such a deal.
“We respect that, but without a program, there is no way to help Greece within the eurozone,” Schauble said.
Asked whether the Greeks could retain the euro currency, Schauble threw the question back, saying, “You have to ask the Greek government.”
The finance ministers were meeting ahead of an emergency summit meeting of the 19 leaders of eurozone countries, including Tsipras. Also expected to attend was Mario Draghi, the president of the European Central Bank, another of Greece’s big creditors. Dijsselbloem was also expected to be at the evening meeting, presumably to report on the afternoon’s proceedings.
Without a positive progress report from the afternoon session, there might be few prospects for the leaders to reach any sort of agreement with Tsipras.
Joseph Muscat, the prime minister of Malta, publicly vented his frustration at the lack of a formal proposal from the Greek finance minister, tweeting that it “doesn’t help this evening’s #Eurozone leaders’ meeting.”
Still, no one presumably wants to take the blame for a possible sudden, chaotic Greek departure from the eurozone. That means that all sides could agree to keep talking even as the crisis reaches new levels of intensity and even as Greece hurtles toward a deadline — a payment of 3.5 billion euros to the ECB on July 20 — that most analysts think it cannot miss without leaving the eurozone.
“Today’s eurozone summit should be another crossroads for either a last-minute compromise or some kind of Grexit,” Carsten Brzeski, the chief economist at the bank ING-DiBa in Frankfurt, Germany, wrote Tuesday in a briefing note, using the term for Greece exiting the euro currency bloc. “However, the biggest hurdle to such a compromise is the bad blood spilled on Brussels’ carpets over the last five months.”
Senior German officials dug in their heels Monday, saying a vote by Greeks to reject further austerity in a referendum last weekend did not oblige other countries in the eurozone to change their positions.
But the finance ministers Tuesday were having their first chance to hear from Tsakalotos, who took over from his combative predecessor, Yanis Varoufakis, on Monday.
Tsakalotos has been coordinating negotiations between Greece and its creditors since April, and his presence at the Eurogroup could provide a welcome change of tone after ministers grew weary of Varoufakis’ hectoring style and long lectures.
The Eurogroup was also meeting just days after the International Monetary Fund concluded that Greece must have some form of debt relief — a central demand by Athens.
But eurozone ministers have shown little sign of willingness to concede debt relief before Greece carries out promised overhauls in areas like taxation and pension spending. The Eurogroup has also flatly refused to open any formal negotiations with Greece on its application for a third bailout package from a eurozone bailout fund.
Eurozone member states have already lent 184 billion euros to Greece as part of two international bailouts since 2010. The rescues have totaled 240 billion euros, including contributions from the IMF and the ECB.