Greek PM in bailout appeal to MEPs

Published: Wednesday 8th July 2015 by The News Editor

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The Greek prime minister is to make a direct appeal to the European Parliament amid growing pessimism over chances of a deal to prevent the country’s financial meltdown.

Alexander Tsipras is to deliver a speech to MEPs in Strasbourg as his government files a fresh request for assistance from the European Stability Mechanism (ESM) bailout fund.

Eurozone counterparts including powerful German chancellor Angela Merkel were left frustrated yesterday after the Greek finance minister Euclid Tsakalotos came to an emergency meeting in Brussels without any concrete proposals.

The eurogroup’s top official, Jeroen Dijsselbloem, delivered a stark warning that time is running out to agree a package of financing and reforms before the country suffers a catastrophic banking collapse, which could force its exit from the currency union.

“The first step will be that the Greek government will send the eurogroup a new request, a new request letter for ESM support and as soon as this comes in … we will have another eurogroup conference call to formally start the process of dealing with this request,” the president told reporters after the summit.

“I will first ask the institutions to look at the financial situation in Greece, their finances and debt sustainability, and then the institutions will come back to us and we will see if we can formally start the negotiations.

“All this has to be done in a matter of days. We have very little time as you are all aware.”

Mr Tsipras told journalists he expected a resolution of the situation by the end of the week. “The discussion was held in a positive atmosphere,” he said.

“The Greek side will continue the effort having the strong weapon of the Greek people’s verdict.”

Some £26 billion was wiped off the value of Britain’s top companies yesterday as Greece engaged in its high-stakes brinkmanship.

With hopes of a deal fading, investors took fright across the continent – sending the FTSE 100 index down more than 100 points.

Germany’s Dax and France’s Cac 40 were also hit, each shedding around 2%.

Mrs Merkel has insisted the door is still open to restarting negotiations, but any new plan must be “serious and credible”.

The European Central Bank (ECB) has tightened the screw on Greece’s embattled banks – which had been due to reopen yesterday but will now remain shut until at least Thursday – by raising the amount of collateral they must provide as security against emergency lending.

Chancellor George Osborne, who is unveiling his first Tory-only Budget, has warned that the UK will not escape the fallout despite remaining outside the eurozone.

He will also cite the crisis as further evidence that the UK must stick to its plans for eradicating the deficit.

With limits imposed on withdrawals, British tourists have been warned to take sufficient cash to cover expected costs and emergencies and to ensure they have supplies of their usual prescription medicines in case of shortages.

Pensions continue to be paid as normal to expatriate Britons living in Greece and measures have been put in place to support British firms facing cash flow problems as a result of capital controls imposed by the Greek government.

Staffing levels have been increased at the UK embassy in Athens, and more consular staff have been deployed on the islands of Crete, Corfu, Rhodes and Zakynthos to help British nationals.

Published: Wednesday 8th July 2015 by The News Editor

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