Greek premier Alexis Tsipras warned that Greece must be ready for a "difficult compromise" in its talks with creditors as his closest advisers arrived in Brussels on Saturday to thrash out a last-minute deal. Cash-starved Greece is under huge pressure to strike an agreement to unlock vital bailout funds in the coming days, if not hours, after top eurozone officials turned the screws Friday and said they were preparing the ground for an Athens default.
Tsipras' closest advisors bring with them Greece's latest bid to end five months of standoff with the EU and IMF, who are demanding tough reforms in exchange for giving Athens 7.2 billion euros ($8.1 billion) still remaining in its international rescue package. "If we arrive at a viable accord, even if it is a difficult compromise, we will take up the challenge because our only criteria is to get out of the crisis," Tsipras was quoted as telling Greek officials Friday in a government statement.
"The decisions and how we handle them belong to us completely, despite their difficulty," Tsipras said, in the clearest sign yet that major concessions by Athens may be on their way. Whatever needs to be done "needs to be done quickly", deputy finance minister Dimitris Mardas told Skai TV in Athens, who predicted that there would be a deal.
European sources said the delegation would sit down with top officials from the EU commission, the ECB as well as the IMF, the three institutions formerly known as the troika, which became an object of hate for many Greeks hardest hit by the crisis.
The urgency increased exponentially on Friday when Europe's top economic officials said they had for the first time ever discussed the prospects of Athens defaulting on its debts.
"In discussions, a default was mentioned as one of the scenarios that can happen when everything goes wrong," a eurozone official told AFP on condition of anonymity after talks in Bratislava Friday. The bombshell came a day after the International Monetary Fund, Greece's most hardline creditor, pulled its technical team from Brussels because it was dissatisfied with the state of the negotiations.
The Athens stock market crashed 6 percent when news of the contingency plans emerged, and fears are high that markets could tumble further Monday without signs of progress over the weekend. The long-running saga over Greece's refusal to agree on reforms demanded by its creditors is set to reach a climax at a meeting of eurozone finance ministers in Luxembourg on Thursday.
A deal to unlock the last payout of Greece's international bailout is needed by then to give national parliaments time to approve it before the bailout expires on June 30. Also on June 30, Greece faces a huge 1.6 billion euro payment to the IMF and a further 3.4 billion euros to the European Central Bank on July 20. Talk of a plan B if Athens should miss payments has been a huge taboo among Greece's eurozone partners and the switching of gears is the first real sign that they are willing to walk away from the table.
No specifics are known on what such a plan would look like, but on the Greek side Athens would see the introduction of capital controls, closure of the banks, and the government issuing IOUs to keep the public sector financially afloat. Asked if he thought the Europeans were bluffing, Greek Finance Minister Yanis Varoufakis said: "I hope they are." "I don't believe that any sensible European bureaucrat or politician will go down that road (of a Greek default)," the outspoken Varoufakis added, speaking to BBC radio in London.
These drastic measures would also pave the way for an exit by Greece from the euro, but officials are for now ruling out that possibility. All efforts are on a "resolution of the Greek crisis" within the current programme, a German finance ministry spokesman said on Saturday. However, Lithuania's Finance Minister Rimantas Sadzius warned: "We have to evaluate all the possibilities but I hope that the Greek government will grasp the seriousness of the situation.
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