EU holds first talks on Greek default as Athens holds out hope

Fri Jun 12, 2015 2:16pm EDT
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By Renee Maltezou and Jan Strupczewski

ATHENS/BRUSSELS (Reuters) - EU officials have held their first formal talks on the possibility of a Greek default, officials said on Friday, but the darkening outlook failed to fluster Prime Minister Alexis Tsipras, who holed up with his negotiators after proclaiming optimism at an open air concert.

In Athens, a government official denied that the possibility of Greece failing to honour its debt commitments had been discussed by the European Union, and said meetings with creditors would resume in Brussels on Saturday.

No one knows, least of all in Athens or Brussels, whether the anti-austerity government can reach a deal with its lenders before an end-June deadline and thereby avoid putting the country in grave danger of crashing out of the euro zone.

But senior euro zone officials are taking no chances, and discussed a series of scenarios in Bratislava late on Thursday, several officials told Reuters. These included a possible default on a 1.6 billion euro ($1.8 billion) payment that Greece must make to the International Monetary Fund, the global lender of last resort, at the end of this month, they said.

While Europe let loose a barrage of warnings, the leftist Greek government exuded calm and optimism. A cheerful Tsipras was mobbed by supporters late on Thursday at an open air concert to celebrate the reopening of a TV station, still wearing the blue suit he had worn at crisis talks that morning in Brussels.

His boisterous mood belied his tough talks with German Chancellor Angela Merkel and French President Francois Hollande on Wednesday, and European Commission President Jean-Claude Juncker on Thursday. Juncker jokingly called the meeting room a "torture room".

The failure to break the stalemate prompted the IMF to send home its team of negotiators on Thursday.

Nevertheless, the Greek government official said Athens was ready to submit counter-proposals to bridge differences with its creditors at the EU and IMF, and hoped for a deal when the Eurogroup of euro zone finance ministers meets on June 18.   Continued...

German Chancellor Angela Merkel (L) shakes hands with Greek Prime Minister Alexis Tsipras (R) at the start of an EU-CELAC Latin America summit in Brussels, Belgium June 10, 2015.  REUTERS/Yves Herman