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Confusion after end of Greek debt negotiations

Andrea Rönsberg, BrusselsJune 29, 2015

European institutions are calling on the Greek people to go against their government and vote Yes in the July 5 referendum. Andrea Rönsberg reports from the increasingly frantic corridors of EU power in Brussels.

https://p.dw.com/p/1Fplv
European Commission
Image: picture-alliance/dpa/D. Kalker

It is clear from the start that this is not one of the Commission's regular midday press briefings: All the seats are taken in the conference room at the European Commission's Berlaymont building, as the Brussels-based journalists wait for Commission President Jean-Claude Juncker. Reporters who have come in with just the usual two minutes to spare before the press conference's designated start are confined to standing along the stairs leading to the podium.

It is the day before the bailout program for Greece is due to end, as well as the day before Greece is due to pay back a debt of 1.6 billion euros ($1.8 billion) to the International Monetary Fund (IMF), a payment which according to Reuters news agency, Greece says it will not make.

And it is two days after monthslong talks between Greece and the other 18 members of the eurozone broke down, following a rejection of Greece's request to extend the bailout program until after a referendum planned for July 5.

Emotional address

Juncker's address is the longest which seasoned Brussels correspondents can recall. It is also the most emotional the former prime minister of Luxemburg has ever been in public. Juncker says he feels "betrayed" by the Greek government, which has accused its creditors of blackmail.

Journalists at a Juncker press conference on June 29, 2015
Journalists in Brussels wait for Jean-Claude JunckerImage: DW/A. Rönsberg

"We don't deserve this criticism," says Juncker, defending in detail the proposal by the creditor institutions – the EU, the European Central Bank (ECB) and the IMF – which was on the table when the Greek delegation walked out of technical negotiations late on Friday.

"This is not a stupid austerity package," says Juncker, explaining that the proposal did not include any wage cuts or cuts in the level of pensions, both of which the Greek government strictly opposed.

Juncker, usually upbeat and light-hearted, seems somber. "This is not a game of bluff," he says, adding: "I am saddened by what happened on Saturday."

Appeal for Greeks to vote 'yes' in referendum

He then appeals to the Greek people to vote Yes in the upcoming referendum, challenging Greek voters to go against their elected government, which had advised them to say No.

European Commission President Jean-Claude Juncker at a press conference in Brussels on June 29, 2015
A downcast Juncker, leaving the podium after an emotional appeal to the Greek people - via the Brussels-based mediaImage: Reuters/Y. Herman

"It is time for the Greeks to speak up and shape their own destiny," says Juncker. A Yes vote, he says "will mean that Greece wants to stay in the eurozone and in the EU." On the other hand, a No would mean "Greece is saying 'no' to Europe. A 'no' would be disastrous."

Little understanding for 'irrational' Greek government

Martin Schulz, president of the European Parliament, says he understands Juncker's disappointment all too well. He himself, he says, refuses to be disappointed, despite his repeated personal meetings with Greek Prime Minister Alexis Tsipras.

But Schulz admits: "It is hard for me to understand how a government can act as irrationally as the Greek government is acting."

After talking with the leaders of all political groups in the European Parliament, Schulz says he is prepared to "run and fight" to convince the Greek people they should vote to stay in the EU, "because a 'yes' is a good basis for negotiations."

What are Greeks to vote on?

Notwithstanding both Juncker's and Schulz' appeal to the voters to cast a Yes vote in the referendum, it remains unclear exactly what the question put to the Greek people will be.

According to Schulz, who said he talked to Prime Minister Tsipras on the phone Monday afternoon, "his intention is to put to the Greek people the decision and the proposal made by the Eurogroup on the 25th of June," Schulz explains, adding that this proposal "is very near to what Juncker suggested and prepared for final negotiations on Friday night."

President of European Parliament Martin Schulz
Martin Schulz says he is prepared to go the extra mileImage: DW/A. Rönsberg

However, it remains unclear how the Greek government can put a document to a vote which simply reflects a state of negotiations, but was never finalized.

Uncertainty as to what happens after midnight on Tuesday

Another problem becomes painfully obvious as Schulz addresses the media: Once the current bailout program for Greece ends at midnight Tuesday, there is no basis for any financial assistance to Greece.

"Greece would be eligible to apply for a new program under the European Stability Mechanism ESM," says an EU official who declined to be named. While new negotiations would not be starting "with a blank form," the whole process would take some time.

Another official adds that talk of a new program for Greece is "purely hypothetical" anyway.

Schulz said the European Parliament has appealed to both sides to "discuss whether there is a possible bridge" between the end of the bailout program on Tuesday night and the referendum on Sunday.

Asked about the specifics of such a "bridge agreement," he says he has no concrete proposal. "But I know that in a critical situation, we have to be creative."

Mood of confusion

As the current bailout program comes ever closer to expiring, it seems that the EU is still grappling to come to terms with all that the end of negotiations with Greece and the planned referendum entails.

"I'm confused," says a member of the Greek press who doesn't want to be named. "I hope that negotiations continue somehow before the referendum." For Greece, she adds, it has been "an unfortunate day."