Surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras
Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras
European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.
A weekend of high tension that threatened to break Europe in two climaxed on Sunday night at a summit of eurozone leaders in Brussels where the German chancellor, Angela Merkel, and President François Hollande of France presented Greece’s radical prime minister, Alexis Tsipras, with an ultimatum.
In what a senior EU official described as an “exercise in extensive mental waterboarding” to secure Greek acquiescence to talks on a third bailout in five years worth up to €86bn (£62bn), the two leaders pressed for absolute certainty from Tsipras that he would honour what was on offer.
While Greece’s fate was being debated in Brussels, in Athens the ruling leftwing Syriza party was showing signs of disintegration. Demands that the reforms be approved by the Greek government and put into law by Wednesday were described as “utter blackmail” by leading party members and met with disbelief.
The German news magazine Der Spiegel called Sunday the biggest day of Merkel’s 10-year chancellorship and appealed to her to “show greatness” and save Europe.
If Der Spiegel was right about the momentousness of Merkel’s day, the same could be said for Hollande of France who, with his government and officials, has been campaigning tirelessly in recent weeks to keep Greece in the euro, helping Athens to draft its proposals.
A decision to go ahead with a so-called Grexit, which has never been closer, would be a shattering failure for Hollande and the resulting Franco-German recrimination would be deeply damaging, say observers.
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