Reuters, BRUSSELS :
Euro zone leaders will fight to the finish to keep near-bankrupt Greece in the single currency on Sunday after the European Union’s chairman cancelled a planned summit of all 28 EU leaders that would have been needed in case of a “Grexit”.
But leftist Prime Minister Alexis Tsipras will be required to enact key legislation in parliament from Monday to start restoring the broken trust of his partners in the 19-nation currency union before they will agree to open negotiations on a third bailout, ministers said. European Council President Donald Tusk announced that he had called off the tentatively planned meeting of EU heads of state and government, saying the euro zone summit to start at 4 p.m. (1400 GMT) would “last until we conclude talks on Greece”. Eurogroup finance ministers resumed a meeting suspended after nine hours of acrimonious debate on Greece’s application for another three-year loan on the basis of reform proposals Tsipras accepted after long resisting.
A draft statement seen by Reuters said Greece must pass laws to change its value added tax and pension systems, reform bankruptcy rules and strengthen the independence of its statistics office before bailout talks can even start.
“The Eurogroup… came to the conclusion that there is not yet the basis to start the negotiations on a new programme,” the draft 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 authorisation by national parliaments in countries such as Germany.
The draft said Greece needed 7 billion euros by July 20, when it must make a crucial bond redemption to the European Central Bank, and a total of 12 billion euros by mid-August when another ECB payment falls due.
It did not say how those needs would be met. A source said the statement would be handed over to the euro zone leaders and might not be issued before they meet.
Several hardline countries voiced support for a German government paper that recommended Greece take a five-year “time-out” from the euro zone unless it accepted and implemented swiftly much tougher conditions, notably by locking state assets to be privatised in an independent trust to pay down debt.
Argument became so heated that Eurogroup chairman Jeroen Dijsselbloem decided to adjourn at midnight and resume talks at 11 a.m. to allow tempers to cool.
“The main obstacle to moving forward is a lack of trust,” Italian Economy Minister Pier Carlo Padoan told reporters.
