ATHENS, Greece (AP) – Greece’s prime minister was heading to high-level meetings in Brussels on Wednesday to try to persuade the country’s creditors to accept a proposal that might unlock much-delayed bailout loans and save the country from financial disaster.
With Greece running out of cash and debt repayments looming as soon as Friday, Alexis Tsipras was to meet Wednesday evening with Jean-Claude Juncker, the head of the European Union’s executive Commission.
“I will go to … explain to him that today more than ever it is necessary for the (creditor) institutions and mainly for the political leadership of Europe to sign up to realism,” Tsipras said before leaving for Brussels.
“We need unity,” he said, speaking of Europe. “I am certain the political leadership of Europe will do what it must.”
Jeroen Dijsselbloem, the eurozone’s top financial official, was also heading to Brussels for the meeting, an official said.
A teleconference between Tispras, German Chancellor Angela Merkel and French President Francois Hollande, tentatively scheduled for Wednesday, had been postponed until Thursday, German finance ministry spokesman Martin Jaeger said.
The EU Commission dampened hopes of a breakthrough on Wednesday, with spokesman Margaritis Schinas saying “this is a first discussion, not a concluding one.”
Still, news of the meeting was enough to encourage investors in Greece, where the main stock index was up 4.2 percent in early afternoon trading.
Time is pressing. Greece needs the 7.2 billion euros ($8.1 billion) in rescue loans from creditors if it is to meet its debt repayments this summer.
It owes 1.6 billion euros to the IMF this month alone. The first instalment of just over 300 million euros is due Friday, with other instalments due on June 12, 16 and 19. Although Greece insists it intends to repay its debts, including Friday’s, it is unclear how much longer it will be able to without outside help.
Without bailout funds, Greece could eventually default on its debts and crash out of the euro, pushing Europe and potentially the global economy into turmoil.
European officials have insisted this is not on the cards.
Spanish Economy Minister Luis de Guindos said he was “completely convinced” a deal would be struck.
Greece’s exit from the euro “is not on the table, let’s make that very clear,” he said in Paris.
One option Greece could choose is to bundle all of this month’s IMF debts into one due June 30, allowing more time for negotiations. While allowed under IMF regulations, the option is rarely used.
Tsipras says he submitted his proposal to creditors on Monday night, as the leaders of France, Germany, the European Central Bank, International Monetary Fund and European Commission met in Berlin to discuss the situation.
He gave no details of his proposal on what fiscal reforms Greece would make in return for its final bailout instalment, but Greece’s creditors said much work remained to be done.
Greece needs the loans because it has been locked out of the international bond markets for five years as wary investors demand prohibitively high interest rates to lend it money. The country has not received new bailout loans since last August.
So far it has managed to scrape together enough to repay its debts by seizing the reserves of state enterprises, including municipalities, schools, embassies and hospitals. But those funds will not be enough to sustain the country through the summer, when it also faces large repayments to the ECB.
Elected in January on promises to repeal the deeply resented austerity measures Greece had to impose in return for its five-year bailout, Tsipras said the Greek side had made concessions during the negotiations.
Apart from negotiating with the creditors, Tsipras must also deal with hardliners from within his own party, some of whom openly say they prefer a rupture in negotiations and an exit from the euro, to capitulation on pre-election promises.
Government officials have said Athens has gone as far as it can in making concessions and that it is now up to Europe to meet Greece part of the way.
But Dijsselbloem countered on Tuesday that this was not a case of give and take and that while the types of reforms Greece must make can be discussed, their net impact on public finances was not negotiable.
“It is a misunderstanding that we have to meet one another half way. That is not our intention,” he told Dutch radio.
