EU mulls Greece cash crunch options, none good

GMT 14:08 2015 Tuesday ,14 July

Arab Today, arab today EU mulls Greece cash crunch options, none good

Greek PM Alexis Tsipras
Brussels - AFP

European governments are struggling to choose from a list of difficult options to help Greece meet its short-term cash needs while it waits for a bailout deal to be finalised, officials said on Tuesday.

Britain has already said it will resist contributing to any bridge financing to get Greece through several huge debt repayments while details are settled after Monday's landmark agreement.

"All of them seem to have disadvantages, legal objections," said Jeroen Dijsselbloem, the Dutch finance minister and head of the Eurogroup of eurozone finance ministers, as he met counterparts.

Finnish Finance Minister Alexander Stubb said it would be "difficult for any member states putting fresh money without conditionality."

"(But) I never underestimate the capacity of European lawyers and economists to come up with a solution," Stubb said.

Alexis Tsipras struck an 85 billion euro bailout deal with his eurozone partners on Monday that involves painful reforms and a parliamentary vote by Wednesday on key austerity measures.

But the deal will take at least several weeks to finalise and implement, and Greece's creditors estimate Athens needs 12 billion euros to get through mid-August.

Next Monday Greece owes the European Central Bank 4.2 billion euros and a default would force the ECB to cut-off emergency loans keeping Athens banks afloat.

Greece already on Monday missed a second debt payment to the International Monetary Fund in two weeks, bringing the country's arrears to the IMF to 2.0 billion euros, an unprecedented embarrassment for a developed nation.

Osborne reiterated that he would refuse any attempt to use EU rescue cash to bridge the financing gap.

"Britain is not in the euro, so the idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter," Osborne said in Brussels.

Britain believes that the European bloc in 2010 agreed to no longer tap an EU-wide emergency fund, the European Financial Stabilisation Mechanism (EFSM), to underwrite bailouts of eurozone countries.

Reports said that France as well as the European Commission were pushing to turn to the fund and would only require a weighted majority of member states to do so.

In another option that would certainly prove to be controversial, German Finance Minister Wolfgang Schaueble proposed that Greece issue IOU's to pay pensions and other domestic bills, thereby saving its scarce euros for debt payments.

But the creation of IOU's is also seen as a first step towards the return of the Greek drachma, and risks rekindling talk of Grexit that Monday's bailout deal was supposed to have buried.

Other options under consideration include bilateral loans from other eurozone countries or transferring 3.5 billion euros in profits on Greek bonds held by the ECB.

Arab Today, arab today
Arab Today, arab today
arabtoday arabtoday arabtoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabs, Arab, Arab