Greece will not benefit from a 30-day grace period should it miss its repayments to the International Monetary Fund on June 30th, the fund’s managing director, Christine Lagarde, said yesterday, prompting fears that the European Central Bank may reassess its emergency liquidity assistance to Greece should it miss its next IMF payment.
With yesterday’s eurogroup meeting concluding without an agreement on the escalating Greek standoff, focus will now turn to a crisis euro zone summit called for Monday evening in Brussels, with a further eurogroup meeting of finance ministers also possible before then.
Klaus Regling, the head of the ESM bailout fund, confirmed that the outstanding €7.2 billion due to the Greece under its current stalled bailout, and a further €10.9 billion earmarked for bank recapitalisation, would expire if the bailout agreement was not renewed on June 30th.
High-level conversations
Earlier, Minister for Finance Michael Noonan confirmed Ireland was consulting with the ECB on contingency plans for a potential Greek exit from the euro zone, with conversations taking place “at a high level” between the Department of Finance, the National Treasury Management Agency and the Central Bank about a possible Greek exit.
Mr Noonan was among a small group of finance ministers who attended a pre-eurogroup meeting of the centre- right European People’s Party, which also includes German finance minister Wolfgang Schauble and Finnish finance minister Alex Stubb.
Mr Noonan warned that lenders had gone “about as far as they can go” on concessions for Greece, noting that significant concessions had been made in the proposal agreed at a key meeting in Berlin earlier this month, at which the German and French prime ministers and the heads of the ECB, IMF and European Commission drew up a revised plan for Greece.
Plan B “That was very significant movement,” the Minister said, adding:
“A lot of people are conscious that a bad deal could be worse than no deal.” Referring to the Berlin agreement, he said: “I don’t see movement beyond that point,” adding “The option is to prepare the B plan.”
Asked if a Greek exit would be a problem for the euro zone, Mr Stubb said: “Not as bad of a problem as it would be for Greece.”
Speaking ahead of yesterday’s eurogroup meeting, German chancellor Angela Merkel told the Greek parliament Greece’s future in the euro zone depended on Athens demonstrating political will meet its financial obligations to EU/ IMF creditors.
The German leader suggested there was still time for an agreement but said Athens had squandered “unprecedented” assistance shown by its EU and international partners to fall behind other crisis countries.
“Unlike Greece, Ireland, Spain and Portugal completed their aid programmes successfully . . . these countries used their chance,” she said.
“Greece, too, was on the right path . . . but necessary structural reforms were delayed time and again.”
