Europe

Greek debt: New proposals to be put to creditors

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Media captionGreece's debt dilemma explained in 75 seconds

A Greek minister has said new proposals will be put to creditors ahead of an emergency EU summit planned for Monday.

State Minister Alekos Flambouraris also told Greek media he believed the European Central Bank (ECB) would not allow Greece's banks to collapse.

Reports say billions of euros have been withdrawn from Greek banks in the past week.

The summit comes amid attempts to prevent Greece defaulting on a €1.6bn (£1.1bn) IMF loan repayment.

The European Commission, the IMF and the ECB are unwilling to unlock bailout funds until Greece agrees to reforms.

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Image caption Anxious Greek savers have withdrawn billions of euros in recent days

They want Greece to implement a series of economic changes in areas such as pensions, VAT and on the budget surplus before releasing €7.2bn of funds, which have been delayed since February.

Details of the new proposals have not yet been released.

Monday deadline

Greek Prime Minister Alexis Tsipras has said he believes "there will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro".

But German Chancellor Angela Merkel has warned there must be a deal between Greece and its creditors ahead of Monday's summit.

Otherwise, she said, the summit would not be able to make any decision.

Mr Tsipras was due to hold further talks with his negotiating team in Athens on Saturday.

Greece has less than two weeks before the IMF loan repayment is due.

If Greece fails to make the repayment, it risks having to leave the eurozone and possibly also the EU.

On Friday, the European Central Bank (ECB) approved more emergency help for Greece's banks. The amount of extra funding has not been officially disclosed.

'Quiet withdrawals'

Reuters news agency said withdrawals by Greek savers between Monday and Friday reached about €4.2bn, which represents about 3% of household and corporate deposits held by Greek banks at the end of April.

Close to €1bn was withdrawn on Friday alone, the financial website Euro2day said.

"There are no lines [queues] or panic, it has been a quiet and gradual phase of withdrawals," one banker told Reuters.

A fully fledged run on the banks could upset the plans of the Greek government and its creditors, says BBC Europe correspondent Chris Morris.

He says that any introduction of capital controls will depend on the behaviour of the Greek people.

He says that if the outflow of deposits from banks reaches alarming levels which no-one can really cope with, then the decision will be taken out of policymakers' hands.


Greece - deal or no deal?

  • Option 1: No deal: Greece defaults on IMF and ECB repayments; ECB pulls plug on emergency bank assistance leading to run on Greek banks, capital controls and potential Grexit
  • Option 2: Greece agrees reform deal with creditors at last minute and avoids default, staying in euro
  • Option 3: No deal reached but both sides paper over cracks and Greece stays in euro for now

Cars and shoe boxes: Greeks cope with an economic crisis

Peston: Is there any way Greece can avoid default??

Walker: The options for Greece

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Greece debt crisis: Full coverage


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Greek debt talks: main sticking points

  • Greece will not accept cuts to pension payments or public sector wages, saying two-thirds of pensioners are either below or near the poverty line
  • International creditors want pension spending cut by 1% of GDP - it accounts for 16% of Greek GDP. They say their target is early retirement not individual pensions
  • EU officials say Greece has agreed to budget surplus targets of 1% of GDP this year, followed by 2% in 2016 and 3.5% by 2018. Greece says nothing is agreed until everything is agreed
  • Creditors also want a wider VAT base; Greece says it will not allow extra VAT on medicines or electricity bills
  • Greece complains creditors focus on increasing taxes instead of cracking down on tax evasion; IMF is concerned Athens is not offering credible reforms

Is Greece close to Grexit?

EU solidarity damaged by Greek splits