Greek proposals on reforms rejected by creditors, Tsipras to meet Merkel, Hollande

The Greek government submitted an updated version of its proposed reforms to its creditors earlier this week but were subsequently rejected as being “insufficient”.

Greek Prime Minister Alexis Tsipras is planning to meet with German Chancellor Merkel and French President Hollande on Wednesday, on the sidelines of the EU-LatAm summit in Brussels.

A report in the daily Corriere della Sera quotes Mr. Tsipras as saying that “we will define a clear timeframe for the deal” in the upcoming meeting, noting that “I think we are very close to a deal on primary surplus for the next few years”. Mr. Tsipras added that “there just needs to be a positive attitude on alternative proposals to cuts to pensions or the imposition of recessionary measures”, highlighting that “Europe and institutions must understand that austerity has failed”.

Mr. Tsipras noted that Greek exit would be the beginning of the end of the Eurozone, arguing that “if Greece fails, the markets will immediately go to look for the next one. If negotiations fail, the cost for European taxpayers would be enormous”.

Speaking on Monday, German Chancellor Angela Merkel noted that “we want Greece to remain part of the Eurozone but we take the clear position that solidarity with Greece requires that Greece makes proposals and implements reforms”, adding that “there isn’t much time left. Everyone is working intensively. The day after tomorrow there will be opportunity to discuss it with the Greek prime minister. Every day counts now”.

“Time is running out for the Tsipras’s administration to secure a deal with its creditors in order to keep both the Greek sovereign and the Greek banking sector funded. We believe that the lack of agreement on key long-term issues (e.g. pension and labour market reforms) will push for an interim deal in coming weeks envisaging a third extension of the current bailout programme. This would allow some extra time for a more comprehensive agreement to take place in coming months.”

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