22nd May 2022

Greece meeting kicks off with EU in 'uncharted waters'

  • Varoufakis (l) pictured with Finland's Alex Stubb (Photo:

A Eurozone meeting on Greece Saturday (27 June) kicked off with a sense of disarray as euro finance ministers expressed surprise by Athens' decision to hold a referendum and admitted they were unsure what was going to happen next.

Eurogroup chief Jeroen Dijsselbloem said he was "negatively surprised by Greece's decision" and said the country had closed the door on further talks.

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Germany's Wolfgang Schaeuble said that Greece had "unilaterally" ended negotiations with its unexpected decision on Friday to reject the latest proposals by its creditors and ask the Greek people to decide whether they will accept them.

Schaeuble said the move meant "there is no more basis" for negotiations. Finnish minister Alex Stubb said it was a "sad day" for Greece and said there was a "clear majority" in the eurogroup against extending the bailout - which runs out on Tuesday - until after the referendum.

His Belgian counterpart Johan Van Overtveldt said "I don't think so" when asked whether the eurogroup would extend the bailout.

Malta's finance minister Edward Scicluna said the Greek move was "very bad timing" as it comes just days before the current bailout expires and a €1.6bn IMF repayment is due.

He said that a referendum should have been called much earlier when it became clear that the main "stumbling bloc" in negotiations was not individual issues but the Greek government's "mandate".

Ireland's finance minister Michael Noonan was the only one going into the meeting who suggested he was "open" on the question of whether the bailout should be extended but he noted that the situation puts the eurozone in "uncharted waters".

Most ministers suggested that what Varoufakis says would be key to their decision. Slovakia's Peter Kazimir was dismissive of what to expect from the Greek saying it would be more "lecturing".

For his part, Varoufakis told Reuters that he is looking for a bailout extension of a "few weeks" to accommodate the referendum and that the government is committed to implementing the outcome of the vote, whatever the result.

But one of the oddities of Saturday's situation is that creditors are being asking to extend the programme for a vote on proposals that the government has said it will campaign against.

Meanwhile, the extension question is just one of a series that have to be answered. There is also the issue of whether the European Central Bank will pull the plug on its funding to Greek banks and whether a bank run will start.

Asked about capital controls, Finland's Stubb said: "That is up to the Greeks themselves. We are in no position to announce capital controls in Greece."

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