The most likely outcome from the meetings that Alexis Tsipras will hold with the Troika will be a third financial bailout of German and French banks, which would mean more austerity policies and cuts for the Greek people.
A third financial rescue is the only option that would favor both sides. It would help Greece access liquidity from the European Central Bank, avoid its exit from the eurozone and stop the impending default. The question is, for how long? Not too long, experts say.
For the eurozone it would be positive because it would allow the failed eurozone project to live another day and for its founders to keep up their message that the Euro is a solid enterprise. That is why both the French President and the German Chancellor have called for “solidarity” in the new negotiations that begin today.
While in public the leaders speak of being tough with Greece, in private it is very different.
Mending broken relations seems to be the goal of the eurozone after the Greek default to the IMF, the end of the rescue and the referendum.
That’s what will be on the table on Tuesday in Brussels as the Greek Prime Minister Alexis Tsipras and his new finance minister, Euclid Tsakalotos, will present their new proposal to access ECB emergency liquidity to banks. Anything short of that would mean the immediate exit of Greece from the eurozone. Yet, the meeting will not be easy.
The President of the European Commission, Jean-Claude Juncker, has ruled out an early agreement at the summit on Tuesday, despite the seriousness of the Greek crisis, especially on the side of the financial sector.
“I am against Greece leaving the euro,” said the head of the executive arm of the EU, although he acknowledged that there are some Member States who favor the so-called Grexit.
“In Europe, the simple answers usually are wrong: the exit of Greece is a mistake, and also an agreement today would be too simple. You need to negotiate by stages to achieve an agreement,” he said.
Only a week ago, Juncker said that the Greek referendum was all about Greece staying in the euro zone but on Monday he back tracked on his statement.
“The NO vote in Greece is not a no to Europe, it is not a NO to the euro: it is a no to a proposal that was already outdated. Tsipras has to explain what the result means,” said Juncker.
He ruled out the idea of having an agreement on Tuesday, but said that time was running out: the ECB tried to suffocate even more the Greek financial institutions just before the start of the negotiations. Meanwhile, France pressed the other partners in the euro zone in the last hours before the special summit to achieve the basis of an agreement with Greece.
Once President Francois Hollande and Chancellor Angela Merkel on Monday agreed to open the door to dialogue with Athens to prevent Greece’s exit, Hollande and several of his ministers contacted leaders of other countries to make a call to “responsibility”.
Prime Minister, Manuel Valls, said he was “convinced” that there is “the basis for an agreement”, but Paris is aware that several countries maintain very hard positions against Athens that can only be overcome if Greece has a “coherent proposal “. Valls noted that France will do “everything possible” to avoid a Greek exit.
“France is convinced that we cannot take the risk of a Greek exit from the euro area, both for economic reasons and, above all, political ones.” The exit of a country out of the single currency area would be “a risk to growth and the global economy.”
But to avoid this, Paris pressed the Greek prime minister, Alexis Tsipras, to present a proposal that is “accurate and credible”.
After hearing the “message of dignity” of the Greek people in the referendum, said Valls, Tsipras needs to exercise “responsibility” and put on the table a proposal that includes important reforms, “some proposals to end the crisis.”
At the entrance to the meeting of the Eurogroup finance ministers agreed on the need to avoid a Grexit, but the hardest opponents to negotiate, like Germany’s Wolfgang Schäuble, made it clear that Tsipras and Tsakalotos will not draw large concessions from euro partners after the resounding NO in the referendum: “A cut in the debt is not covered by the rules” said Schäuble.