ECB crisis talks expected as Greece teeters on brink of debt default

ECB crisis talks expected as Greece teeters on brink of debt default

The European Central Bank (ECB), one of Greece's three international creditors along with the International Monetary Fund (IMF) and the European Commission, was expected to hold talks on Sunday on whether to extend a crucial financial lifeline to Athens after a bailout package expires on June 30.


The ECB could play a critical role in aiding Greek banks to stay open in the face of massive withdrawals by Greeks who fear that capital controls could be introduced if the country defaults on its debt.


Greece's debt crisis reached a head on Saturday after eurozone finance ministers refused a request from Athens to extend a bailout deal until after a referendum called by Prime Minister Alexis Tsipras.


The Greek parliament voted in favor of the July 5 referendum late on Saturday. Greeks will be asked to vote on whether to accept conditions stipulated by creditors on Friday in exchange for further bailout money - conditions the government itself rejects.


Without an extension or further international loans, Greece is likely to default on a 1.5 billion euro ($1.7 billion) repayment to IMF due on Tuesday.


Greek 'destiny'


Greece has been locked in tense negotiations with its international creditors since January, when Tsipras' Syriza party rode to election victory on pledges to end austerity measures demanded by the EU and IMF in exchange for two bailouts worth 240 billion euros.


Top EU officials on Saturday spoke out against Greece being forced to leave the single-currency eurozone as a result of any default, with German Finance Minister Wolfgang Schäuble saying the country "remains a member of the eurozone" and "a part of Europe," while his French counterpart Michael Sapin spoke of Greece's "destiny" in the euro.


But Austrian Finance Minister Hans Jörg Schelling was quoted in the Sunday edition of Austrian paper "Die Presse" as saying that an exit of Greece from the eurozone, or "Grexit," "appeared almost inevitable now," adding, however, that this would be possible only if Athens first asked to leave the EU and other countries agreed to the request.


Canceled Israel visit


As a sign of the gravity of the situation, German Deputy Chancellor Sigmar Gabriel, who is also economy minister, on Sunday canceled a planned two-day trip to Israel, according to a spokesman from the Ministry for Economic Affairs and Energy.


Gabriel is now to be represented on the trip by his state secretary, Brigitte Zypries.


The deputy chancellor had been scheduled to talk with both Israeli President Reuven Rivlin and Prime Minister Benjamin Nethanyahu.


Zypries will now replace Gabriel at the opening of a special exhibition in Tel Aviv called "Made in Germany" that marks the 50th anniversary of the commencement of German-Israeli diplomatic relations.











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