Euro zone ministers refuse to reopen Greek talks

Greece’s international creditors will run the risk of a high-stakes referendum on a rescue plan for the country next Sunday after they bluntly rejected last-minute attempts by Athens to restart bailout talks.

Prime minister Alexis Tsipras offered big concessions to the creditors on Wednesday but backtracked within hours with a televised attack on the lenders, accusing them of blackmail.

Although the Tsipras concessions triggered anticipation that a deal could yet be reached this week on the basis of the creditor proposal, euro zone finance ministers refused to reopen the negotiation after the prime minster said Greeks should reject the plan in the referendum. The plebiscite is now set to go ahead.

However, a slim majority of Greeks are set to vote against their government in the referendum, according to the latest opinion poll that gave the Yes side a four-point lead.

The survey, conducted by GPO for BNP Paribas bank, put the Yes vote on 47.1 per cent and the No side on 43.2 per cent. It also found that 60 per cent of those asked believed Greece should remain part of the euro zone, no matter what the cost.

Greece’s default

After Greece’s default on the IMF, a vote against the plan would call into question the possibility of a deal before private sector and ECB debts fall due later this month. A vote for the plan would probably pave the way for creditors to strike a deal, but it would seriously undermine Mr Tsipras and his administration. Greek banks remain closed until next Tuesday, greatly increasing strain on the country and its financial system.

The euro zone ministers refused the request for further talks when they discussed the matter during a conference call, saying they would await the outcome of the referendum.

‘No talks’

“There will be no talks in the coming days, either at eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements,” said Dutch minister Jeroen Dijsselbloem, who chairs the talks.

“We will simply await now the outcome of the referendum on Sunday and take into account the outcome of that referendum.”

In a separate development last night, the ECB agreed to maintain the amount of special aid for Greek banks at the current level of just below €89 billion. There will be no reduction in the €60 per day limit on bank withdrawals, but ECB governors have discussed imposing steeper discounts on the collateral pledged by the banks. It remains unclear when the ECB will return to that question.

After a letter from Mr Tsipras to the creditors was interpreted as a capitulation to their main demands, the prime minister went on television to accuse the EU leadership of extreme conservatism.

He also rejected claims that he had caved in to creditors’ demands in a proposal which would have seen Greece accept most of the fiscal measures they sought.