Eurozone finance chiefs have warned
of tough negotiations ahead as they meet to decide whether Greece's new
reform proposals merit a third debt bailout.
Germany's Finance Minister Wolfgang Schaeuble said the talks would be "extremely difficult".
Eurogroup chief Jeroen Dijsselbloem spoke of a "major issue of trust" over Greece's resolve to implement reform.
But Greece's Economy Minister Giorgos Stathakis told the BBC his government was "committed to moving forward".
Greek
MPs have voted in favour of the measures proposed by PM Alexis Tsipras -
despite the fact that many of the ideas had been rejected by the Greek
people in last Sunday's referendum. Follow the latest updates here
As
the 19 eurozone ministers gathered in Brussels to discuss Greece's
plans, many said they remained to be convinced that Athens would follow
through on its proposals. Analysis: Theo Leggett, BBC News
The Frankfurter Allgemeine Zeitung newspaper says it has seen a German position paper which sets out two possible options for Greece.
1.
It could transfer assets worth €50bn into a special fund, to be sold
off to pay creditors. 2. Take a a five year "time out" from euro
membership, in order to restructure its debts.
A note of caution.
Although this paper appears to come from within the finance ministry, it
does not necessarily reflect Germany's actual position in the talks.
Indeed, there are some indications that it doesn't.
Officials may
well have been exploring numerous different options. These could simply
have been leaked in order to put more pressure on Greece during the
negotiations.
It is hard to see the benefits of casting Greece
into a limbo where it would apparently be neither a full member of the
euro, nor committed to producing its own currency and rebuilding its
economy outside the single currency zone.
However there seems
little doubt that, even if this weekend's talks prove fruitful, future
negotiations between Greece and its creditors are likely to be fraught. Will a deal be reached? Why did Greece hold a referendum? Did Greeks really fail to pay 89.5% of taxes?
Media captionGiorgos
Stathakis told the BBC's Gavin Hewitt there would be a deal formed this
weekend and that the country would build trust "step by step"
"There
are many concerns, quite a bit of criticism both on the content of the
proposals, but also on the even more difficult issue of trust," Mr
Dijsselbloem said.
"How can we really expect this government to
implement what it's now promising. I think it's going to be quite a
difficult meeting."
Mr Schaeuble was blunt: "We will definitely not be able to rely on promises."
Media captionHow a family survives on withdrawing €60 a day
Reports
are emerging that Germany has drawn up plans for Greece to temporarily
exit the eurozone if this weekend's talks fail - something Athens says
it has not been made aware of.
Greece's economy minister appeared confident that a deal would be done "in the next 24 hours".
"There
are certain improvements compared to the proposal that was on offer
before the referendum," Mr Stathakis told the BBC. "The main one is debt
restructuring."
unifying VAT rates at standard 23%, including restaurants and catering
phasing out solidarity grant for pensioners by 2019
€300m ($332m; £216m) defence spending cuts by 2016
privatisation of ports and sell-off of remaining shares in telecoms giant OTE
scrapping 30% tax break for wealthiest islands.
Mr Tsipras has admitted that the package "entails many proposals
that are far from our pledges, from what we feel is right for the
recovery of the economy" and were only "marginally better" than
proposals put forward by the creditors last month.
Some members of
the prime minister's own Syriza party voted against the proposals
during the vote in parliament overnight, angry at his apparent U-turn on
austerity.
Greece in numbers
€320bn
Greece's debt mountain
€240bn
European bailout
177% country's debt-to-GDP ratio
25% fall in GDP since 2010
26% Greek unemployment rate
Reuters
But, without a deal, Greece risks crashing out of the euro.
Banks
have been closed for two weeks now and a €60 (£43; $66) daily limit on
cash machine withdrawals, imposed on 28 June, remains in force for Greek
citizens. Many people say they have only been able to withdraw €50, as
there are no smaller denomination notes.
Greece's creditors - the
European Commission, European Central Bank and International Monetary
Fund - have already provided more than €200bn in two bailouts over the
past five years.
The second expired on 30 June, when Greece fell into arrears on an IMF loan.
Following
the eurozone finance ministers summit, Eurogroup leaders will meet in
Brussels on Sunday afternoon, followed two hours later by a full meeting
of EU leaders. At the scene: Jasmine Coleman, BBC News, Athens
Punters
are watching for their numbers on TV screens outside a betting cafe in
central Athens. Next to broadcasts of motorbike racing, lottery draws
and athletics, TV commentators give the latest on the debt crisis.
But
George Vassis, 45, is not betting on the politics. "Who knows what will
happen?" he asks. Like many here, he is weary after months of talks and
economic decline.
He runs a business information company and
wants an end to the current deadlock. "Something must be done. The
measures the government is offering are bad, but it's the only way to go
forward."
Mr Tsipras has faced backlash to his proposals, but for
George much of the damage has already been done. His company will have
to make redundancies either way - he is just waiting to find out how
many. All Greek to you? Debt jargon explained How easy is it to swap currencies?
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