Details of Greece’s reforms are to be submitted Thursday, giving time for creditors to review them ahead of a summit of the European Union’s 28 members set for Sunday.
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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.
This upcoming weekend should now be considered the final and definitive line in the sand for a more lasting agreement between Greece and its global creditors.
The country failed to pay €1.6 billion to the International Monetary Fund on June 30.
Pensioners wait outside the main gate of the national bank of Greece to withdraw a maximum of 120 euros ($134) in central Athens, Thursday, July 9, 2015.
“We are determined not to have a clash with Europe but to tackle head-on the establishment in our own country and to change the mindset which will take us and the euro zone down”, he said to applause from the left. The Athens stock market remained closed, alongside the banks. Payments overseas have been banned without special permission.
Without evidence of a bailout plan, Draghi and his colleagues on the Governing Council refrained from increasing Emergency Liquidity Assistance for Greek banks from the current total of nearly 89 billion euros ($98 billion).
“It looks like it will be another day of waiting for the markets, with all eyes on Greece’s somewhat shaky ability to produce a proposal”, said Connor Campbell, analyst at Spreadex trading group.
Speaking in the European Parliament following the Greek PM’s address, Mr Farage told Mr Tsipras: “They will give you no more, these people”. They may take a conditional decision to recommend opening negotiations on a loan agreement provided Greece implements certain “prior actions” by a short deadline.
Greek Prime Minister Alexis Tsipras is vowing to present quote, “credible” plans to seal more emergency loans from the European Union.
Investors will also scrutinize the minutes from the Federal Reserve’s June 16-17 meeting to see if the storm clouds over Greece and China will have any effect on the timing and pace of an interest rate increase.
There are only two possible outcomes on Sunday, says Carmen M. Reinhart, a professor of the worldwide financial system at Harvard University in Cambridge, Mass.
Sunday has the feel of being a make-or-break date for Greece.
But that doesn’t mean negotiations will cease.
He stressed a viable, long-term debt deal is required to ensure the country can “get onto the pathway of stability”.
According to Finland’s Finance Minister Alexander Stubb, the eurozone is not looking at bridge financing for Greece “at this stage”, Reuters said.
Greece on Wednesday requested a three-year bailout from the eurozone’s rescue fund on Wednesday and pledged to start implementing some economic-policy overhauls by early next week. Alexis Tsipras, the Greek prime minister, was greeted with a mixture of adulation and fury as he told the European Parliament his country had become an “austerity laboratory”.
But he said the solution must be based on “mutual respect and equality” and must not “repeat the mistakes of the past which condemned the Greek economy to an impasse of austerity, which trapped our economy in a recessionary vicious circle”. But she also said eurozone leaders were aware of their joint responsibility for the common currency.
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Without European Central Bank funds, a quasi-currency will emerge, Reinhart says.
