The Commission proposal, which is to be put to European Union finance ministers for approval later on Wednesday, makes clear however, that Greece can only get the bridge loan if it passes a set of reforms in its parliament already on Wednesday.
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In other words, the International Monetary Fund is now openly at war with Germany (and its sound money compatriots like Finland) over debt forgiveness, which futher underscores the split in Europe between the German bloc and the those who favored leniency for Greece, and, by extension, a relaxation of the doctrine of strict fiscal discipline that has dominated EU politics (in word if certainly not in deed in the periphery) since the onset of the European debt crisis.
Arriving in Parliament, Valavani said she was not going to vote in favor of the agreement, and that this meant she could not stay on as part of the government.
An independent United Nations expert on foreign debt says Greece’s creditors may break global law if the austerity measures they demand lead to undue hardship. “But the policies offer a course out of the crisis”.
Germany’s hawkish Finance Minister Wolfgang Schaeuble expressed doubts about the “not very constructive” Commission plan, but it is not clear which way Berlin would vote on the matter.
He said that this had undermined the thriving holiday trade between Britain and Greece, warning the United Kingdom would “reap a bitter harvest” from its failure to support the country.
Greece does not have the money to make a 4.2 billion euro ($4.7 billion) payment to the European Central Bank on July 20.
Greece also has to settle around Euro 2 billion in missed payments to the worldwide Monetary Fund since June 30.
“All options are quite hard and have certain legal, political, financial complications”, said Valdis Dombrovskis, the European Commission vice president in charge of the euro.
EU officials told AFP the Commission, the EU’s executive arm led by Jean-Claude Juncker, had “prepared these proposals and submitted them to the (European) Council”, which groups the leaders of the 28 member states.
Although Britain is signed up to an emergency European Union fund, Prime Minister David Cameron believes he has won an opt-out as the United Kingdom is not a member of the Eurozone.
Stubb says it’s probably “impossible to back down at this stage” and that it’s possible Greece may get bilateral loans.
Schelling added he had heard from sources in the European Central Bank that emergency liquidity assistance (ELA) for Greek banks is likely to be extended.
Skepticism and caution abounds about the harsh bailout deal.
In a statement Tuesday, the White House said Obama considered “the agreement a positive step that could help underpin a return to growth and debt stability in Greece” but noted that “further work will be required”.
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Lew, in telephone calls with Greek Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos, urged the Greeks to “fully” implement the budget cuts and economic reforms they had agreed to.
