Eurozone officials pressured Greece on Sunday to accept more austerity reforms to obtain another bailout to stave off financial collapse, with reluctant Greek officials calling the terms humiliating at an emergency summit in Brussels.
Under the proposal, Greek Prime Minister Alexis Tsipras would be required to push through sweeping tax increases and pension cuts in the parliament by as early as Wednesday to persuade his country’s 18 partners in the eurozone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout program.
In a four-page draft proposal put to eurozone leaders and obtained by The Associated Press, language up for discussion spoke of a potential “time-out from the euro area” for Greece if no agreement is reached.
A Greek government official, in a first reaction to the draft, said, “How can they demand all these measures at the last minute without securing a lifeline to see us through till next week?”
Another government source called the proposal humiliating and disastrous.
Still another Greek official said the eurozone’s plan for privatizing $50 billion of Greek assets is “on another planet.”
Mr. Tsipras said on arrival at the summit in Brussels that he wanted “another honest compromise” to keep Europe united.
“We can reach an agreement tonight if all parties want it,” he said.
But German Chancellor Angela Merkel, whose country is the biggest contributor to eurozone bailouts, said conditions were not right to start negotiations. She sounded cautious in deference to mounting opposition at home to more aid for Greece.
“The most important currency has been lost, and that is trust,” she told reporters. “That means that we will have tough discussions and there will be no agreement at any price.”
Facing a self-imposed Sunday deadline, the eurozone’s top official, Jeroen Dijsselbloem, said the sides have “come a long way” after two days of talks among finance ministers, but “some big issues” remained.
Underscoring optimism despite the often fundamental differences among the leaders, Italian Prime Minister Matteo Renzi said, “We are very close.”
The eurozone’s proposal highlighted the increasing frustration with Greece during five months of fruitless talks. On Sunday, doubts about the Greek government’s commitment to implement tough measures continued.
If Greece meets the conditions, the German parliament will meet Thursday to mandate Mrs. Merkel and Finance Minister Wolfgang Schaeuble to open the talks on a new loan. Then Eurogroup finance ministers would meet Friday or during the weekend to formally launch the negotiations.
A European official said members at a Eurogroup meeting Monday could discuss ways to provide emergency finance to keep Athens afloat.
“The Eurogroup came to the conclusion that there is not yet the basis to start the negotiations on a new program,” the document sent to national leaders said.
“Only subsequent to legal implementation of the above mentioned measures can negotiations on the memorandum of understanding commence, subject to national procedures having been completed,” it said, in a reference to authorization by national parliaments in countries such as Germany.
The draft said Greece needed $8.1 billion by July 20, when it must make a crucial bond redemption to the European Central Bank, and a total of $13.5 billion by mid-August when another payment falls due.
Several hard-line countries voiced support for the German proposal that Greece take a five-year “time-out” from the euro unless it swiftly accepted and implemented much tougher conditions, notably by locking state assets to be privatized in an independent trust to pay down debt.
But French President Francois Hollande, Greece’s strongest ally in the eurozone, dismissed the notion, saying it would start a dangerous unraveling of EU integration.
“There is no such thing as temporary Grexit; there is only a Grexit or no Grexit. There is Greece in the eurozone or Greece not in the eurozone. But in that case, it’s Europe that retreats and no longer progresses, and I don’t want that,” he said.
European Council President Donald Tusk canceled a summit of all 28 EU leaders that would have been needed in case of a Greek exit from the single currency, and said eurozone leaders would keep talking “until we conclude talks on Greece.”
• This article is based on wire service reports.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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