Graeme Wearden (now) and Jennifer Rankin (earlier) 

Greek crisis: new bailout request filed – as it happened

European leaders told Greece it has five days to agree a reform plan, or face leaving the single currency
  
  

EU leaders have just five days to reach a deal to stop Greece tumbling out of the eurozone. Aris Messinis/AFP/Getty Images
EU leaders have just five days to reach a deal to stop Greece tumbling out of the eurozone. Photograph: Aris Messinis/AFP/Getty Images

PS: The Greek banks aren’t opening until Sunday’s summit has taken place....

Evening summary: Waiting for Greece's detailed plan

The Greek crisis seems to have calmed down tonight, so let’s do a summary. We’ll lurch back into life if there are major developments.

Greece is racing to finalise a detailed list of reforms to present to its creditors, in a final attempt to avoid exiting the eurozone.

Finance minister Euclid Tsakalotos submitted a request for a third bailout his morning, offering immediate action on taxes and pensions if creditors looked kindly on this urgent request.

It is being analysed tonight:

France has shown solid support for Greece today, as we rattle towards Sunday’s emergency summit.

President Francois Hollande told reporter tonight that:

“Time is short, but France will ensure that Greece is encouraged to produce as precise a plan as possible to inspire trust, that trust that is indispensable if the Eurogroup (of euro zone finance ministers) is going to be able to give its position.”.

Earlier, prime minister Manuel Valls told French MPs that it was too dangerous for Greece to leave the eurozone.

Prime minister Alexis Tsipras has experienced a rough ride at the European parliament today, being criticised by several MEPs (highlights start here).

Liberal leader Guy Verhofstadt has set social media alight with a seven-minute attack, in which he blasted the Greek leader for failing to tackle clientism and vested interests in Greece.

Tsipras hit back, though, saying Greece had become an ‘austerity laboratory’, adding:

We were in a fiscal stranglehold, we were thinking more about how to keep the economy alive.

Adding:

We have ideological differences, we are divided on issues, but this is a crucial time to be able to pool our forces.

And promising:

Tomorrow once again we are going to come up with some very specific proposals.

There really is no time to lose now; the ECB has warned that it will pull support from the banking sector without a deal by Monday. And economists now believe that Greece is more likely to leave the eurozone than stay (according to a Reuters poll today).

I’ll be back later if there are major developments. Otherwise, see you in the morning.... GW

Alexis Tsipras’s meeting with president Prokopis Pavlopoulos looks rather pleasant, given he was explaining how Greece could be facing the eurozone exit door on Sunday:

Alexis Papahelas, the prominent political commentator has just told SKAI News:

“It is clear Greece is tragically isolated. The prime minister spent a nightmarish last night in Brussels,” he said adding that the atmosphere had much improved with Euclid Tsakalotos in the finance minister’s seat.

He added:

“The French are doing very important things for Greece.”

Tsakalotos will return late tonight to Athens to have one last round of meetings with the Greek prime minister over the proposed reform plan the country will table with creditors tomorrow evening.

Updated

We’re hearing that Alexis Tsipras’s meeting with the Greek president has ended.

He’s now headed off for talks with the Stavros Theodorakis, the leader of the centrist To Potami party:

Greece is under intense pressure to table a last-chance blueprint for radical economic reform, tax increases and spending cuts on Thursday in order to secure a future in the euro and stave off financial collapse, writes our Europe editor Ian Traynor.

The reform proposals are to be sent to Greece’s creditors with negotiations at the critical stage. The embattled Greek prime minister, Alexis Tsipras, accused his eurozone creditors on Wednesday of exploiting his country as an “austerity laboratory” for the past five years while formally asking Europe for three more years of rescue funds.

The countdown to Greece’s financial collapse shifted into its gravest phase after European leaders set Sunday as the deadline by which Tsipras has to capitulate to their menu of cuts, tax rises and fundamental reforms of the Greek economy in return for bailout money. Otherwise, EU leaders said, Greece will be cut off from the eurozone, triggering banking chaos, insolvency, and probable exit from the single currency.

With the five-year crisis entering a climactic five days, much will hinge on the details of the reforms that Athens is to send to the troika of bailout supervisors on Thursday. The European Central Bank, the International Monetary Fund and the European commission are to receive the details by midnight on Thursday, giving them 48 hours to examine them, negotiate, and reach a verdict before another European summit on Sunday either blesses the proposed deal or focuses on plans for coping with a new Greek currency and how to mitigate the expected post-euro humanitarian crisis in Greece.

Tsipras sounded characteristically defiant in his first big speech – to the European parliament in Strasbourg – outside Greece in almost six months in office. He declared that justice was above the law, repeated that his victory in securing a rejection of EU austerity in a snap referendum on Sunday did not mean Greeks wanted to quit the euro.

The days of treating Greece as an “austerity laboratory” were over, he vowed. “The experiment was not a success”....

Here’s the full story:

If you’re just tuning in you can see Verhofstaft’s speech here.

Over in Athens the Greek government has announced that prime minister Alexis Tsipras will visit the country’s head of state, president Prokopis Pavlopoulos, “immediately,” reports Helena Smith.

A government statement says:

“the prime minister will visit the president of the republic immediately in order to inform him of the latest developments.”

#developing

Over in Athens there is mounting concern that freedom of speech has begun to pay a heavy price as the crisis deepens.

Our correspondent Helena Smith reports

Is the Greek media being one-sided or are bodies attached to prime minister Alexis Tsipras’ leftist-led administration deliberately trying to silence the press? In a country feeling the social spasms that come with economic free-fall, that is the question now being asked as prominent TV anchors faced investigation for allegedly favouring the ‘yes’ campaign in Sunday’s referendum.

Private channels (many owned by the oligarchal elite and other business interests) have been accused by the state-run media watchdog and the Union of Journalists and Athens daily newspapers (ESIEA) of purposefully cultivating a climate of fear and breaching electoral law in the run up to Sunday’s vote.

Nine anchors, household names in a nation now addicted to TV news broadcasts, have been told to appear before the disciplinary committee of ESIEA to answer allegations that the government-backed ‘no’ campaign was deliberately frozen out of programming. ESIEA’s governing board is now dominated by Syriza sympathisers; so too is the judiciary which has also launched an inquiry into the claims.

“In 2009 we missed the big story,” said Paschos Mandravelis, who has been widely vilified for his commentary in the conservative daily, Kathimerini.

“We failed to see that the crisis was coming. Now journalists are asking the right questions, sometimes there is exaggeration but they are basically saying ‘look something is wrong, very wrong’ and for that they are being punished, deliberately hounded and silenced.”

The claims have lead to howls of protests that along with the economy democracy is now also at stake. Highlighting those concerns Kathimerini felt fit to write in its editorial today.

“The regime mentality that has evolved in certain centers of power is cause for grave concern and it is just a matter of time before it becomes a real threat to democracy and everything it holds truth.”

For its part, Syriza – many of whose members hail from the pro-Soviet KKE communist party – says it is being deliberated by the apparatus of a rotten political elite determined to oust the leftists from power.

Updated

Latvia’s central bank governor, Ilmars Rimsevics, doesn’t share Manuel Valls optimism that a Greek deal is within reach.

He told Latvian TV that:

It’s one thing to put an plan on the table but implementation is something else. Why should people believe that the new proposal will be for real?”

Rimsevics is clearly unimpressed with Athens, adding:

“It’s hard to imagine what Tsipras could offer to the Eurogroup today or tomorrow.”

(quote via Reuters)

Updated

The French PM is now love-bombing the Greek people by tweeting in their language:

Which I reckon means:

To the Greek people , I say: Greece is Europe!

Greece’s request for a third bailout has now been passed onto the European Commission and the European Central Bank.

Eurogroup president Jeroen Dijsselbloem has asked them to assess Greece’s financing needs, the risk it poses to the eurozone, and the sustainability of its public debt:

Hello.... the eurozone finance minister’s conference call that was cancelled this morning might be back on again:

Presumably to discuss Greece’s bailout request:

Bloomberg is reporting that the European Central Bank has left Greece’s emergency liquidity support unchanged.

That means ELA stays capped at €89bn, and Greek banks remain closed.

Guy Verhofstadt’s speech on Greece this morning has now been uploaded to YouTube, and it’s worth watching.

As we covered this morning, the leader of the liberal group in the European Parliament tore into Alexis Tsipras, criticising him for talking about reforms but never delivering.

Verhofstadt’s conclusion should be ringing in Tsipras’s ears on his way home to Athens:

“How do you want to be remembered? As an electoral accident who made its people poorer? Or as a real revolutionary reformer?

Show that you are a real leader and not a false prophet.”

The French government’s optimism over Greece is not shared by its counterparts in Berlin, by all accounts.

So, Manuel Valls’ claim that a deal is “within grasp” may actually highlight the fracture between the eurozone’s largest members.

Analyst Marc Ostwald of ADM Investor Services says:

There is a strong possibility that the deal is agreed and then voted down in national parliaments.

[Valls’ comments] imply Germany and France are on a totally different page of the book..... [therefore] Germany leaves?

Valls has confirmed that French MPs would vote on a third Greek bailout (if we get that far).

Updated

This weekend will be absolutely crucial for Greece, the French prime minister adds:

French PM: Vital to keep Greece in Europe

France continues to be Greece’s staunchest ally in the battle to avoid Grexit.

Prime minister Manuel Valls has told MPs that it’s vital to protect Greece’s place in the eurozone.

Valls said:

“Keeping Greece in the euro and therefore in the heart of Europe and the EU is something of the utmost geostrategic and geopolitical importance,

“Allowing Greece to exit the euro zone would be an admission of impotence - France refuses that.”

Valls then tantalised MPs with the prospect of consummation between the two sides; a deal between Athens and creditors was “within grasp”, he claimed.

Updated

The head of Britain’s fiscal watchdog has warned that the UK economy will suffer if the Greek crisis escalates.

Robert Chote, head of the OBR, made the comments as he responded to today’s UK budget:

And for rolling coverage of the budget, go here:

The penny, euro, or possibly drachma has dropped in the City.

Economists now believe there is more chance of Greece leave the eurozone than staying.

US Treasury Secretary: Greece debts aren't sustainable

US Treasury secretary Jack Lew appears to have thrown his weight behind calls for a Greek debt restructuring.

Speaking at the Brookings Institution in Washington DC, Lew warned that Greece’s debts are not sustainable, echoing the IMF’s concerns. He pointed to a “deep” reluctance among some European countries to face up to the issue, though.

Lew also (again) urged both sides to reach a deal, warning that Greece would face a painful adjustment if it left the euro.

We simply don’t need the “geopolitical mistake” of a Greek meltdown, he added (perhaps looking nervously towards Moscow?)

Updated

Finland’s finance minister tweets:

And it will probably all come down to the last five minutes...

European Commissioner Pierre Moscovici has just been interviewed on Bloomberg about Greece.

Time is running short, time is very short, says Moscovici.

But all isn’t lost... Mr Tsipras knows what he has to do. He must present credible reforms, so we can ensure Greece remains in the eurozone.

Moscovici also points to the poverty in Greece:

Everyone must be aware that this country has lost 25% of its GDP, that 25% are unemployed, that half the youth are unemployed.

So who’s fault is that?

The responsibitity must be shared, Moscovici says. But one factor is that Greece economy wasn’t strong enough, or determined enough to reform. It should have reformed 15 years ago - it is imperative that reforms are undertaken now.

Greece hasn’t put a figure on the new bailout it is looking for, but it would easily be north of €50bn.

The FT’s Peter Spiegel explains:

The International Monetary Fund has estimated a three-year programme could cost as much as €70bn.

And Peter also flags up Greece’s (polite) request to consider measures to make its debt sustainable and viable:

Although the IMF has urged some kind of debt relief, eurozone creditors have fiercely resisted any kind of write-down — though they have been more open to extending the repayment schedules for their current bailout loans. The Greek request is certainly not a table thumping demand, rhetorically. But the intention is certainly clear.

More here.

Greece submits new bailout request

While the European Parliament debate was raging, Greece quietly submitted its formal request for a new aid package in an attempt to avoid crashing out of the eurozone.

Finance minister Euclid Tsakalotos has asked for a three-year programme, from the bailout fund (the European Stability Mechanism). And in return, Greece would commit to:

“to a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth.”

Importantly, Tsakalotos’s said that Greece is proposing to “immediately” implement measures, starting next week.

That would include “Tax reform related measures” and “Pension related measures” -- two of the “red lines” that proved so hard to tackle in recent months.

Tsakalotos also promises to flesh out these proposals on Thursday, with “a comprehensive and specific reform agenda” which can be assessed by the IMF, ECB and European Commission.

And there’s no ducking the debt relief question: Tsakalotos says:

Greece welcomes an opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term.

Here’s the full letter:

Reaction to follow....

There were high jinks in the European Parliament this morning -- UKIP’s Nigel Farage aligned himself with the Greek “No” campaign by carrying one of their famous OXI signs, until the EC president confiscated it.

Freedom of speech, Mr Juncker?

Extending the Greek bank holiday until Friday night is not a pledge that they’ll reopen on Monday, of course:

It always seemed unlikely that Greece’s banks would reopen before Sunday’s emergency summit.

And Reuters is now reporting that the current ‘bank holiday’, due to expire on Wednesday night, will be extended further.

That means banks stay closed, and cash machines will still only dole out €60 per day.

The work never stops if you are Europe’s most powerful leader.

After Tuesday’s fractious summit in Brussels, Angela Merkel was back in Berlin for a meeting with her cabinet this morning. She is pictured here with Sigmar Gabriel, her vice chancellor, who warned Greeks they had “torn down the last bridges” by voting against the EU bailout plan.

Next on the the German chancellor’s agenda is a two-day trip to the Balkans, where she will visit Albania, Serbia and Bosnia-Herzegovina - all countries that aspire to join the EU.

But the Greek debt crisis is never far away, as the economic chaos ripples across the region.

Reuters in Tirana has a good account of how the Greek crisis is hurting its neighbours.

Greece’s debt crisis is inflicting hardship on Greeks but the shockwave is fanning out too into its ex-Communist neighbours which are economically dependent on Greece and, because they are poorer, even less well equipped to deal with the consequences.

The potential impact on countries such as Albania, Kosovo, Serbia, Macedonia and Bulgaria is likely to be on the agenda of German Chancellor Angela Merkel - a central player in the Greek debt drama - when she visits the region starting on Wednesday.

With Greece losing its appeal as a source of earnings for Albanian migrant workers, more are heading to Germany instead. Some 16,000 Albanians have sought asylum in Germany from January to May, with 4,900 arrivals in May alone.

“The Greeks have no money, they are themselves in a crisis,” [one Albanian worker told Reuters]. “They told us to come and work again in two weeks and get the money.”

Among an estimated 600,000 Albanians who work temporarily in Greece, he and his friends had been making the trip for the past eight years. Things had been lean since the 2008 financial crisis but, he said, never so bad as now.

“They never kept money from us for agriculture jobs, but could do nothing about the banks this time,” he said.

Updated

The European Commission is fielding questions from journalists in Brussels at its daily briefing.

A spokeswoman says there will be no briefings on Grexit, because the Commission is not planning on this scenario.

Tusk: "really and truly the final wake-up call"

Donald Tusk is playing the peacemaker in his final remarks to the European Parliament.

He says the source of the crisis in Greece is over-spending not the common currency.

He has a message for the Greek government

Seek help among your friends and not among your enemies, especially when they are unable to help you.

That’s you, Vladimir Putin.

Tusk also has a message for Greece’s creditors

If you want to help your friend in need do not humiliate him.

We need unity not because unity is a beautiful ida but because unity is indispensable to take decisions.

This is really and truly the final wake-up call.

Tusk notes that Greece has filed its bailout proposal this morning and says he hopes that is a good omen.

More applause.

Updated

Jean-Claude Juncker is now making his closing remarks.

Once again, he is defending the European Commission that he leads.

He says he has stood up against cuts in pensions for the Greek people and fought to help Greece get a €35bn aid package. This depends on how you define cuts and whether you believe the Commission’s sums.

Update 12.43 As we have reported elsewhere the €35bn doesn’t really exist; the number is recycled money from the EU budget and notional private-sector funding that hasn’t yet been pledged.

The Commission has also gone along with creditors’ wishes to cut the “solidarity grant” available for Greece’s poorer pensioners. Any Greek pensioner in line to lose this benefit would probably dispute Mr Juncker’s defence of Greek pensions.

Updated

Tsipras hits back

Back at the European Parliament, Alexis Tsipras is defending himself against earlier attacks from MEPs.

He admits that over the last five month his government has spent more time negotiating than governing.

We were in a fiscal stranglehold, we were thinking more about how to keep the economy alive.

He says his government brought to justice many Greeks who had committed tax evasion, rebutting the critique it has done nothing to reform the Greek economy.

I want your support to help change Greece... We all understand that this debate is not exclusively about one country. It is about the future of our common construction, the EU and Europe

We have ideolgical differences, we are divided on issues, but this is a crucial time to be able to pool our forces.

Tomorrow once again we are going to come up with some very specific proposals.

And as we are talking about Greece, the inevitable references to ancient tragedy...

Sophocles taught us that the greatest law of all human laws is justice... and I think that is something we have to remember.

And that is it

Loud applause from MEPs.

Foreign journalists have been arriving en mass in Athens over the past few weeks.

The Guardian’s Emma Graham-Harrison touched down earlier today in the Greek capital, where she found little sign of the political turmoil shaking the country.

In the arrivals hall at Athens airport there seemed little sign of a slowdown in summer tourist traffic, with long lines for passport control, a crowd jamming the arrival hall and lines at ATMs just two or three people long -- no more than you would expect at a busy airport.

A taxi driver (the mainstay of lazy foreign reporting I know, but they are on the front lines of the tourism industry) said a few repeat customers had decided to put holidays on hold but overall arrivals only seemed to be down by a fraction on this time last year

Meanwhile, the Telegraph’s Ambrose Evans-Pritchard has been to the market.

Updated

Journalists and pundits watching Alexis Tsipras’s speech to the European Parliament do not sound convinced he helped his cause.

The European Parliament gets a nod of approval, although not everyone shares this view.

Ministerial talks on Greece's bailout proposals cancelled

News just in: today’s meeting of eurozone finance ministers has been cancelled.

A spokesman for Jeroen Dijsselbloem, the Dutch finance minister, who chairs the eurogroup, announced the conference call would not take place as planned.

But in an important step, Greece has filed a proposal for financial aid under the eurozone’s bailout programme, the European Stability Mechanism.

Officials in the Eurogroup working group (EWG) are meeting to discuss the latest ideas from Athens.

Here are some pictures of Mr Tsipras’s trip to the European Parliament in Strasbourg.

As we reported earlier, the Greek prime minister was blasted by leaders of the centre-right and liberal groups.

He had a much friendlier reception from the Socialists, the second-largest group in the Parliament.

Gianni Pittella, president of the group, said Europe and the eurozone without Greece was unthinkable.

That seemed to provide some comfort to Mr Tsipras.

But he was soon back in the firing line again. The leader of the Greens, Rebecca Harms, warned Tsipras of cosying up to Vladimir Putin. The Greek prime minister took the initiative of calling the Russian president on Monday, after that resounding rejection of the Greek bailout plan.

So has Greece submitted its new bailout proposal to finance ministers or not?

Earlier reports suggested it didn’t arrive overnight, but it’s not clear if it has yet landed in ministerial inboxes.

Angela Merkel gave Greece until Thursday to lay its plans on the table, but finance ministers are supposed to discuss “concrete proposals” later today by tele-conference.

Watch this space.

Update: It’s arrived:

Updated

Greek opposition call for emergency talks

Over in Athens the political opposition is demanding that party leaders reconvene for an emergency meeting to discuss the ultimatum the Greek government now faces. Our correspondent Helena Smith reports

Anxiety in Athens this morning is almost palpable. Among a political elite who would have played the game very differently, there is mounting concern that one wrong move and Greece will not only be headed for euro exit but years of purgatory on the periphery of Europe.

Highlighting that angst, New Democracy’s parliamentary spokesman, Kyriakos Mitsotakis, said this morning it was now urgent that political leaders coalesce immediately.

“The president of the republic (POR) must assemble the council of political leaders now,” he tweeted. “And don’t tell me that he doesn’t have official authority. He has a moral obligation.”

Earlier Mitsotakis had tweeted that the “time had come to learn the truth.” The Greek parliament needed to be informed with an urgent debate in the 300-seat House – and not just the European parliament.

The centre-right New Democracy, which oversaw Greece’s entry into the then European Community in 1981, announced this morning:

“A national red line is participation in the euro and in Europe. The government has the responsibility in negotiations and Mr Tsipras ought to bring, as he has promised, an agreement that will keep the country in the euro zone.”

Truth is, back in Athens very few have any idea what the proposed agreement now involves. After five months of bungled handling of negotiations under Tsipras, all they know is that any deal is going to be much, much tougher than originally thought given the Greek economy’s freefall following the closure of Greek banks.

Updated

Nigel Farage is on his feet now.

The European project has started to die.

The plan has failed. The whole of the Mediterranean finds itself in the wrong currency.

There is a new Berlin Wall and it is called the euro.

The former City trader and UKIP leader proves to be an unlikely friend of the radical Marxist Greek prime minister.

He calls Weber’s “attack” on Tsipras disgusting and praises the Greek government for calling a referendum against the “bullies” in Brussels.

If you have got the courage you should lead the Greek people out of the eurozone with your head held high.

Yes it will be tough for the first few months, but with a devalued currency and friends all over the world you will recover.

Updated

Verhofstadt in full flow.

Updated

Verhofstadt’s speech doesn’t seem to be easy for the Greek prime minister to listen to.

Europe is "sleepwalking to Grexit"

Guy Verhofstadt, the leader of the liberal group in the European Parliament, warns that Europe “is sleepwalking towards a Grexit”.

He is laying into Tsipras for not coming up with detailed reforms.

I am even ready to come to Athens to discuss it with because I like such a challenge.

He outlines his plan for reform:

  1. End the clientelist system in Greek politics i.e. party cronyism and rewarding loyalists with jobs.
  2. Downsize the public sector
  3. End privileges - privileges of the military, the orthodox Church, the Greek islands and the political parties.

There is never such a prime minister in Greece who has such a strong mandate as you.

You need to come forward with your reform pacakge, it is not a chicken or egg situation.

The choice is very simple, Verhoftstadt says, whether you want to be remembered as an accidental prime minister or a real revolutionary who modernised his country.

Updated

The European Parliament debate on the Greek bailout crisis continues here.

I will round up reactions a little later.

More from Manfred Weber


Sounds like a blistering speech, well worth listening to. Oh

Updated

Greek gov should apologise for terrorism slur, says German MEP

German conservative MEP Manfred Weber goes straight on the attack in his response to Tsipras.

He refers to Greek government ministers who have talked of sending migrants to other European countries and accused their European creditors of terrorism.

If the prime minister of Greece comes to us he should apologise for those utterly unacceptable statements... he has passed over them in silence.

Weber makes it clear Tsipras and his government is responsible for this European crisis.

You are destroying confidence in Europe

Updated

I’m battling with the live-feed, but picked up Tsipras’s final soundbite.

This is not exclusively a Greek problem, this is a European problem and European problems require European solutions.

Others caught more of the substance.

Tsipras says Greece needs an agreement with its neighbours that “shows there is light at the end of the tunnel” and brings credible and necessary reforms.

Over the last five years, he says, reforms have been put in place that have been burdensome on the Greek people.

We must have a basis in which we an succeed on the basis of sustainable development.

So far, the Tsipras speech sounds as if it is aimed at a domestic audience.

Greek government has mandate for "socially-just" result - Tsipras

Greek prime minister Alexis Tsipras is now up.

A few days after this verdict we have now been given a mandate to re-double our efforts in order to get a socially-just and economically sustainable solution.

He praises the Greek people for a “courageous response” as banks closed and media pressure to vote yes grew.

Updated

Now Jean-Claude Juncker of the European Commission takes his turn to address MEPs. The live feed is fading in and out, so I will turn to the quick smart tweeters in Strasbourg/with bigger bandwidth to fill the gaps.

All share blame for Greek debt crisis - Tusk

Tusk is calling on EU leaders to search for a consensus, in remarks almost word-for-word the speech he gave last night.

He strikes a conciliatory tone:

All sides of the negotiations share the responsibility for the status quo.

Our inability to find agreements may lead to the bankruptcy of Greece and the insolvency of its banking system.

I have no doubt that this will affect Europe, also in a geopolitical sense.

As Plutarch once said: “to find fault is easy, to do better may be difficult”... let us prove him wrong.

Updated

Donald Tusk, president of the European Council, is speaking first.

He starts with the usual pleasantries to Luxembourg, the country that has just taken up the six-month presidency of the EU.

Now the substance:

We meet at a unique and difficult time for Europe and our monetary and economic union.

He begins by giving a report to MEPs on the latest meeting of the European Council in late June, when EU leaders had a rancorous argument about migration quotas and dealing with the humanitarian crisis on their borders.

It was the first time European leaders had an honest exchange on the refugee question.

A reminder that Greece is not the only crisis the EU is grappling with...

Here is a scene from the Parliament.

Alexis Tsipras has just taken his seat to cheering and (I think) some booing, but a little hard to tell from the live feed.

European Council leader Donald Tusk has just entered the European Parliament’s plenary session in Strasbourg, so it looks as if we will soon begin.

Greek finance ministry denies IOU currency plan

The denial follows a report in Kathimerini that the government was preparing to introduce a parallel currency to the euro. Unnamed sources told the paper the finance ministry was considering an IOU currency in case Greece failed to secure a deal.

And...

Updated

The Tsipras/Juncker/Tusk speeches at the European Parliament will get underway at 9.45am (8.45 British summer time), so we will have to wait a little longer.

In the meantime, Ryan Heath of Politico has come up with some questions he thinks Alexis Tsipras must answer.

The Greek prime minister Alexis Tsipras will be speaking to the European Parliament in Strasbourg in the next few minutes.

We are also expecting to hear from Jean-Claude Juncker of the European Commission and Donald Tusk, who chairs the European Council of EU leaders.

You can watch the speeches here.

ECB to pull support from Greek banks without a deal

The European Central Bank has warned that failure to reach an agreement on Sunday, will leave it with no choice put to pull the plug on its support for Greek banks.

Christian Noyer, a member of the ECB’s decision-making governing council, said Sunday was the last chance to reach a deal and avoid “catastrophe” for the Greek economy.

Speaking on French radio this morning he said:

The Greek economy is on the brink of a catastrophe. There must be an agreement next Sunday [12 July] at the very latest. After that it will be too late and the consequences will be grave.

I fear that if there is no agreement on Sunday the Greek economy will collapse and there will be chaos.

The importance of this statement cannot be under-estimated.

The ECB has poured €89bn into the Greek financial system in recent months to stave off collapse, but is barred from lending to insolvent institutions. Noyer, governor of France’s central bank, said Greece’s ECB lifeline could not be stretched indefinitely.

We have rules and we have interpreted the rules to their limit to maintain a lifeline to Greek banks, but we cannot continue indefinitely to increase the risks we are taking.

Quotes from Reuters/Boursorama

The Guardian’s G2 cover story looks at the one practical way everyone can help Greece: go there.

Here is a flavour of Alex Andreou’s article:

The weather is just as stunning as it ever was this time of year; the archaeological sites just as interesting; the beaches just as magical; the food just as heart-healthy. The prices are significantly cheaper than usual. It is one of those rare everybody-wins situations.

The people are even more welcoming, more hospitable and more grateful than ever. The reaction to difficulty has been a broader smile, a wider embrace. We understand that you have a choice and we understand why you have chosen Greece right now. Tourism is liquidity. Tourism is solidarity.

Want to help Greece? Go there on holiday

Opposition leaders in Greece are anxiously watching the twists and turns of talks in Brussels, Berlin and Paris.

As Kathimerini reports the political council of the centre-right New Democracy party met for the first time since Vangelis Meimarakis replaced Antonis Samaras as leader. Samaras was a prominent voice on the yes side in the referendum and fell on his sword as soon as the results became clear.

The conservatives urged Tsipras to sign an agreement, reopen Greek banks and ensure depositors’ money is safeguarded.

The government does not have a mandate for rupture [with lenders] but one for bringing back a viable agreement.

Analysts at Deutsche Bank are sounding a smidgeon more hopeful that an agreement between Greece and its creditors can be reached.

But they think Greek prime minister Alexis Tsipras will have to sign up to even stricter conditions to get bailout cash, because the Greek economy has worsened in recent days, increasing the country’s financing needs.

Here is an extract from their interesting post-summit analysis: (my highlights)

The Europeans last night set the framework around which Greece’s Eurozone exit can be averted: Greece effectively has to negotiate the outline of a new 3rd ESM [European Stability Mechanism i.e bailout] program by the end of the week. Whether the Greek side is prepared to accept this remains an open question. Last week’s referendum has politically empowered the Prime Minister, who has the political capital to vote an agreement through parliament. At the same time, it is likely that the level of policy conditionality required from the Greek government is even tougher than before the referendum. As things stand, we attach a marginally higher probability to a post-midnight agreement being reached: the support for Eurozone membership in Greece is clear and the political and economic costs of capital controls are rising. But it is a close call. The future of Greece’s position in the Eurozone is likely to be decided by the end of the week.

To break away from Greek news for a moment: we’ve just heard the boss of Barclays bank has been sacked.

Can anyone think of a replacement?

Greece's place is in the eurozone - Moscovici

A deal is possible, says Pierre Moscovici, France’s European commissioner and perennial optimist on the Greek debt talks.

Yes, an agreement is possible, essential. We must avoid avoid Grexit. The ball is in Greece’s court .

He revealed the Greek proposals had not arrived overnight, ahead of a finance ministers’ conference call this morning I’m sure they are on the way.

There is urgency about Greece. We are awaiting proposals and concrete reforms.

And to hammer home the message

Greece’s place is in the eurozone. The door of the European Commission remains open.

Economists, such as ABN AMRO’s Nick Kounis, are not sounding so hopeful.

Updated

Nobody knows whether EU leaders can find a way out of this mess.

Under the best case scenario, Greece could have a new bailout ready by mid August.

Under the worse case scenario, Greece goes bankrupt and faces a humanitarian emergency.

It’s worth noting that the German chancellor Angela Merkel brushed aside the idea that anyone should think she was an optimist.

In their report on last night’s summit Ian Traynor and Larry Elliott map out what to expect in the next few days.

Tuesday night’s decisions in Brussels portend several days of frantic, round-the-clock negotiations. Athens is expected to ask for a new bailout programme worth up to €60bn over two to four years as well as measures to reduce its ballooning debt.

The chances of securing a deal hinge on the levels of cuts, austerity, and fundamental reforms of economic and fiscal systems that the Greek government is prepared to endure after Tsipras stonewalled for five months and then called his snap referendum.

Merkel ruled out any flat writedowns of Greek debt, but there is likely to be scope for debt restructuring.

Greece given days to give bailout deal or face banking collapse and euro exit.

Summary

Good morning and welcome to our rolling coverage of the Greek debt crisis.

Europe has days to agree a plan that will enable Greece to stay in the eurozone and stave off bankruptcy.

There have been countless last chances, final offers and unmissable deadlines, but now the endgame really is unfolding.

Donald Tusk, the president of the European Council, said failure to secure a deal would lead to the bankruptcy of Greece, “painful” consequences for the Greek people, with geopolitical effects across Europe.

Speaking after a summit of eurozone leaders last night, he said:

If someone has any illusion that it will not be so, they are naive.

The stark reality is that only have five days to find the ultimate agreement.

Until now I have avoided talking about deadlines, but tonight I have to say it loud and clear - the final deadline ends this week.

Greece’s fate will be sealed at an emergency summit of European leaders on Sunday. That’s right, there will be another European summit. This time all 28 European Union leaders are to attend. In the words of the German chancellor Angela Merkel, bringing in non-eurozone countries is to demonstrate that “we are all part and parcel of the same European Union”. It is also a sign of how close Greece is to leaving the single currency - something that doesn’t exist in the EU rule book.


We have a packed agenda today.

  • The Greek prime minister Alexis Tsipras will address the European Parliament in Strasbourg at 9.30am (8.30am British summer time). Donald Tusk and Jean-Claude Juncker, the president of the European Commission, will also be speaking to MEPs on the Greek crisis.
  • Eurozone finance ministers will be holding a conference call to discuss Greece’s request for a loan from the EU’s €500bn bailout fund, the European Stability Mechanism. Some ministers were scathing when Greece failed to produce a proposal on Tuesday, so let’s hope Greece has their plan ready today.
  • We will also be tracking all the reaction in Greece - is the Tsipras government about to sign on the line for the proposal Greeks rejected on Sunday? Will any leader make a decisive intervention to stop Grexit - an outcome so many have said they want to avoid.

Plenty to come, so stay with us...

Updated

 

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