The euro zone requires credible reforms to avoid the “Grexit”

grece-possede-encore-chance-demeurerThe euro zone expects Greek reform proposals “credible” to avoid the worst-case scenario in the country that could drift out of the single currency, a prospect that scares some, two days after the resounding no in the referendum.

Before an extraordinary summit of the eurozone expected to 12: 30 pm (Eastern time), the finance ministers of the Eurozone met at noon in Brussels.

A first for the new Greek Minister Tsakalotos Euclid, replacing the flamboyant Yanis Varoufakis.

Coordinator of discussions between Athens and its creditors, Mr. Tsakalotos is more sober than its predecessor, but not necessarily more flexible.

Monday evening, he found that the Greeks “deserved better” after the no in the referendum, and that “they would not accept a non-viable solution. He entered without a word Tuesday on arrival at the meeting with his counterparts.

It is for the Greeks to “tell how they wish to act to avoid the worst,” Pierre Moscovici said on Tuesday, the European Commissioner for Economic Affairs.

But if the result is not satisfactory, an exit of Greece from the euro zone is “not excluded,” warned Valdis Dombrovskis, Vice President of the European Commission adopting a harsh tone face in Athens, edged with hawkish comments from Jean-Claude Juncker.

Before the European Parliament, the head of the EU executive found that it was “time to meet at the negotiating table.”

“I want us we gathered to find a solution,” he insisted, even though “this solution will not find today.” “My desire, my wish is to avoid a Grexit” (an out of the eurozone, Ed).

A “realistic possibility”

But a majority of countries no longer wants to help Greece, after two aid plans totaling 240 billion euros (335 billion dollars) and months of heated negotiations with the radical left government Alexis Tsipras, who took office earlier this year.

“A Grexit would not be a problem for Europe,” has held the Latvian Finance Minister Janis REIRS. “Extending these discussions would be harmful, we must take courageous decisions in one direction or the other,” said his side the Slovak Peter Kazimir.

Less categorical, Maltese Minister Edward Scicluna believes that Grexit is a “realistic possibility” but we must not shake as a “stick”.

The camp hard against Greece has strengthened and has, in addition to Germany, the countries of the east, as well as those that have been hardest hit by the debt crisis, such as Portugal.

Faced with this coalition, France, Spain, Italy or Luxembourg want to be more accommodating and trying to hear a different story.

“An exit from the euro zone is not on the table,” said the Spanish Minister Luis De Guindos, who is running for the presidency of the Eurogroup while his Luxembourg counterpart Pierre Gramegna said he was open to a restructuring of the colossal Greek debt.

France is on the line and “will do everything to ensure that Greece remains in the euro area as this is its place at the heart of European integration,” said Tuesday morning the Prime Minister Manuel Valls.

On Monday evening, President Francois Hollande had received German Chancellor Angela Merkel at the Elysee. They had agreed to require Mr. Tsipras “proposals quite accurate” and “serious” to possibly negotiate a new aid plan, as requested by Athens last week.

This plan would cover the needs of the country, about 30 billion euros (42 billion dollars), while restructuring its debt, that Berlin refuses at all costs.

In Athens, banks remain closed until at least Wednesday and capital controls imposed on citizens will continue.

Monday night, the European Central Bank, the last institution that keeps alive the Greek economy through financial drop by drop to Greek banks, continued its work.

But it has also tightened the conditions of these emergency loans, baptized ELA, which puts additional pressure on Greek banks already dry.

Chests of Athens are empty, or nearly so, and the country has to face in the coming days at various repayments, some to private creditors, but especially several billion euros to the ECB on 20 July.

If Athens does not pay or do not find an agreement, the ECB could let go of the Greek banks, propelling the country on track for an exit from the euro zone, a completely new scenario.

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