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14th Aug 2022

Lenders to present last offer to Greece

  • Angela Merkel, Jean-Claude Juncker and Francois Hollande at the German chancellery on 1 June. An offer for a deal will be sent to Greece this week. (Photo: Bundesregierung)

Leaders from Germany, France, the EU and the International Monetary Fund met on Monday night (1 June) in Berlin to prepare what could be a final offer for Greece.

German chancellor Angela Merkel, French president Francois Hollande and EU Commission president Jean-Claude Juncker were in the German capital for a meeting with European Roundtable of Industrialists and had planned to talk about Greece in the margins of the meeting.

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They were joined in a dramatic last minute move by European Central Bank president Mario Draghi and IMF leader Christine Lagarde.

The talks ended around midnight and Merkel's office issued a statement saying the participants "agreed that work must now be continued with greater intensity”.

"They have been in closest contact in recent days and want to remain so in the coming days, both among themselves and naturally also with the Greek government," the statement continued.

The unscheduled meeting of Greece's creditors took place four days before Greece is due to repay €300 million to the IMF, with three other repayments also coming later this month.

An agreement with Greece would unblock a €7.2 billion international loan.

The talks were to work on a common proposal that would be sent to the Greek government this week, said diplomatic sources.

According to the Financial Times, the talks in Berlin focused on a technical paper prepared by the European Commission that could be the basis for a compromise.

Greece's lenders hold different views over whether to make concessions to Athens, with the IMF reportedly more strict on the rules and the Commission and ECB more willing to fence off the Eurozone from the risk of a Grexit.

The statement issued after the meeting suggests that these differences were not completely overcome.

The Berlin meeting also took place the day after Greek prime minister Alexis Tsipras wrote in Le Monde newspaper that his government already made "serious concessions" and was not responsible for the lack of agreement.

German media said on Monday night that the Greek PM was ready to consider pension cuts and an increase of the retirement age.

The question now will be whether a "take it or leave it" offer from the lenders will help Tsipras win the backing of his Syria party, where tensions are growing over the prospect of further concessions.

On Tuesday morning, EU Finance commissioner Pierre Moscovici said on French radio that "discussions are starting to bear fruits".

"A deal is possible, desirable, necessary and it is within reach," he said.

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