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[h=4]European leaders debate Greece rescue through the night[/h]BRUSSELS — The leaders of the 19 nations that use the euro currency are deciding on an an "ambitious" proposal drafted by finance ministers for a third bailout that will rescue Greece from the brink of bankruptcy.
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European leaders are meeting Sunday to hash out the terms of a Greek bailout in what could be Greece's last chance to keep the euro.
Video provided by Newsy Newslook
Greek Prime Minister Alexis Tsipras arrives at the eurozone leaders' summit on the Greek crisis, at the European Council headquarters in Brussels, Belgium, 12 July 2015.(Photo: Ian Langsdon, EPA)
BRUSSELS — The leaders of the 19 nations that use the euro debated into early Monday morning whether to rescue Greece from the brink of financial ruin or cut the country loose from the currency bloc and let it fend for itself.
The leaders hashed out a tough proposal put forward by European finance ministers, following marathon talks by the finance ministers on whether to approve a third bailout for Greece.
A draft statement of the finance ministers Sunday stresses the "crucial need" to rebuild trust with the Greek authorities as a prerequisite for a new loan. It suggests that in the case of no agreement , negotiations should begin on Greece's temporary exit from the common currency zone — a "time out" that might also require a new debt repayment schedule.
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The draft statement also calls on the Greek parliament to approve tax and pension reform measures to reduce Greece's budget deficit, and it suggests Greece privatize $56 billion of its assets and use the proceeds to reduce its debt, now approaching a quarter of a trillion dollars.
The draft estimates Greece's financing needs at $90-$95 billion — more than the new three-year, $59 billion infusion of funds Greece has requested. It says Greece urgently needs $7.8 billion by July 20 — when it must make a repayment to the European Central Bank — and $6 billion by mid-August.
The hashtag #ThisIsACoup was trending on Twitter, as users of the social networking site in Greece and elsewhere called for Tsipras to leave the summit.
French President Francois Hollande, who wants to keep Greece in the eurozone, said as the leaders convened that France would do all it can to reach an agreement Sunday and keep the continent united. "It is Europe that is at stake," he said.
But in a sign of the division among the leaders deciding Greece's fate, German Chancellor Angela Merkel said the talks will be "tough" and she ruled out "agreement at any price."
"The most important currency has been lost — and that is trust," said Merkel, who has been skeptical of giving Greece a new loan on top of $240 billion the country already has received since 2010. Greece, which has been in a prolonged slump, has been unable to make a payment recently due on that debt.
One idea floated by Germany is to force Greece out of the eurozone for several years until it takes more action to get its financial house in order. That would require it to return to the drachma currency. Greece's government opposes that step.
Following the meeting of finance ministers, Finnish Finance Minister Alexander Stubbs said the group "made a lot of progress and were able to draft, I think, a very ambitious proposal and report for the heads of state and government."
"I think it's a document that has far-reaching conditionality on three accounts," he said — (Greek) laws that have to be pushed through by July 15, tough conditions on labor reforms, pensions, value added tax and taxes, and tough measures on privatization and privatization funds.
"The bottom line is that if there is to be an opening of ESM (European Stability Mechanism) negotiations, all of these conditions have to be met and approved by both the Greek government and the parliament," he said.
The ESM — an EU agency that provides financial help — needs 85% of votes from member countries to approve a bailout.
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Greek Prime Minister Alexis Tsipras told reporters he was ready for a compromise. "We can reach an agreement tonight if all parties want it," he said.
Greek banks have been closed for two weeks and cash withdrawals at ATMs are restricted to about $66. Without more help from the European Central Bank (ECB), the Greek banking system may soon run out of cash.
A spokesperson for U.S. Treasury Secretary Jacob Lew said Lew, who spoke with Tsipras on Sunday morning, was encouraged by reports of some progress, and said that rebuilding trust needs a demonstration that a reform program will be implemented and that measures will be undertaken to make Greece's debt sustainable.
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Greeks react to new bailout package with resignation, relief
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