Europe

Greece debt crisis: Eurozone 'sceptical' of reform pledge

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Media captionEU finance ministers underline need for trust with Greece

Eurozone finance chiefs are seeking further signs from Greece that it is serious about delivering its promises of reform in return for a debt rescue.

Several ministers arrived for their crunch meeting in Brussels expressing scepticism that Athens would implement the austerity measures it has proposed.

The meeting later adjourned and will reconvene on Sunday morning.

Eurogroup chief Jeroen Dijsselbloem said negotiations were "still very difficult" but work was in progress.

Earlier, Greece's Economy Minister Giorgos Stathakis told the BBC his government is "committed to moving forward".

Greek MPs have voted in favour of the measures proposed by PM Alexis Tsipras - despite the fact that many of the ideas had been rejected by the Greek people in last Sunday's referendum.

How the day unfolded

The meeting between 18 eurozone ministers and Greek Finance Minister Euclid Tsakalotos in Brussels began early afternoon on Saturday and continued late into the evening before breaking up.

Talks are due to resume at 09:00 GMT, Mr Dijsselbloem said.

One unnamed European official, quoted by the Associated Press, said there was a general feeling in the room that the Greek proposals are "too little, too late" and as such "more specific and binding commitments" are needed from the government in Athens.


Analysis: Chris Morris, BBC News

So a pause for breath overnight before finance ministers resume in the morning. No-one thought this would be easy.

They want more specifics from Greece - more on product and labour market reform, and possibly a commitment to pass specific reforms in the Greek parliament in the coming days.

But there are still much broader issues at stake - countries which think that the numbers being talked about represent far too much money to offer Greece in a third bailout.

And the divisions within the eurozone have become increasingly public.

Finland's government appears to be in open revolt about a third bailout. Italy, on the other hand, is set to demand that a deal must be pushed through on Sunday for the sake of European unity.

On one issue all sides agree - this is not just about the future of Greece, it is about the credibility of the single currency.

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Media captionGiorgos Stathakis told the BBC's Gavin Hewitt there would be a deal formed this weekend and that the country would build trust "step by step"

Arriving for the meeting, Mr Dijsselbloem admitted there were many concerns not only about "the content of the proposals, but also on the even more difficult issue of trust".

"How can we really expect this government to implement what it's now promising. I think it's going to be quite a difficult meeting," he said.

German Finance Minister Wolfgang Schaeuble was blunt: "We will definitely not be able to rely on promises."

Mr Schaeuble was at the centre of a report in a German newspaper that he had drawn up plans for Greece to temporarily exit the eurozone if this weekend's talks fail - something Athens says it is not aware of.

There are also unconfirmed reports that Finland has refused to agree to the new bailout proposals, although on its own it is unlikely to stop any deal going ahead.

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Media captionHoward Johnson follows a family only able to withdraw €60 a day

Greece's economy minister appeared confident that a deal would be done "in the next 24 hours", pointing out that Greece's creditors have said the proposed package is a basis for further talks.

"The government is committed, the parliament is committed to moving forward. Now we need to build trust," Mr Stathakis told the BBC's chief correspondent Gavin Hewitt.

If a deal is not agreed among the finance ministers, it will be discussed again by Eurogroup leaders meeting in Brussels on Sunday.

That meeting will be followed later in the day by a summit of all 28 EU leaders, which EU President Donald Tusk said would be a "last chance" for Greece to secure a deal and avoid exciting the euro.


Crisis countdown

  • 11 July: Eurozone finance ministers discuss plans (Brussels 13:00 GMT)
  • 12 July: Eurogroup leaders meet (14:00 GMT) followed by summit of all 28 members of the European Union (16:00 GMT). Both Brussels
  • 20 July: €3bn payment due from Greece to the European Central Bank

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Greece is asking creditors for €53.5bn ($59.47bn; £38.4bn) to cover Greece's debts until 2018, but the amount of the new bailout could reach €74bn, as Greece seeks a restructuring of its massive debt, which it says is unsustainable.

Of the €74bn, €58bn could come from the EU's bailout fund, the European Stability Mechanism, with €16bn from the IMF, sources said.

The measures submitted in the new Greek document include:

  • tax rise on shipping companies
  • unifying VAT rates at standard 23%, including restaurants and catering
  • phasing out solidarity grant for pensioners by 2019
  • €300m ($332m; £216m) defence spending cuts by 2016
  • privatisation of ports and sell-off of remaining shares in telecoms giant OTE
  • scrapping 30% tax break for wealthiest islands.

Mr Tsipras has admitted that the package "entails many proposals that are far from our pledges, from what we feel is right for the recovery of the economy" and were only "marginally better" than proposals put forward by the creditors last month.

Some members of the prime minister's own Syriza party voted against the proposals during the vote in parliament overnight, angry at his apparent U-turn on austerity.

Greece in numbers

€320bn

Greece's debt mountain

€240bn

European bailout

  • 177% country's debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Reuters

But Greece's financial situation is dire.

Banks have been closed for two weeks now and a €60 (£43; $66) daily limit on cash machine withdrawals, imposed on 28 June, remains in force for Greek citizens. Many people say they have only been able to withdraw €50, as there are no smaller denomination notes.

Mr Stathakis said that if a deal is reached this weekend, Greece's banks will reopen "very soon - within the week".

The capital controls, he said, "will take a few months to be totally removed - it will be a quick process as long as the deal is there".


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Media captionVasilis Papadopoulos, an accountant, says he is leaving Greece because 'nothing is changing'

At the scene: Jasmine Coleman, BBC News, Athens

Punters are watching for their numbers on TV screens outside a betting cafe in central Athens. Next to broadcasts of motorbike racing, lottery draws and athletics, TV commentators give the latest on the debt crisis.

But George Vassis, 45, is not betting on the politics. "Who knows what will happen?" he asks. Like many here, he is weary after months of talks and economic decline.

He runs a business information company and wants an end to the current deadlock. "Something must be done. The measures the government is offering are bad, but it's the only way to go forward."

Mr Tsipras has faced backlash to his proposals, but for George much of the damage has already been done. His company will have to make redundancies either way - he is just waiting to find out how many.

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