Emergency euro summit called after Eurogroup fails to break deadlock

Eurozone leaders are to convene on Monday for an emergency summit to discuss the Greek crisis after eurozone finance ministers meeting in Luxembourg on Thursday failed to make any progress toward breaking an impasse between Greece and its creditors as withdrawals from Greek banks intensified.

In the late evening, as it became clear that the deadlock remained, European Council President Donald Tusk called a summit for Monday, writing on his Twitter account, “Time to discuss the situation of Greece at highest political level.”

At a press conference last night, Greek Finance Minister Yanis Varoufakis told reporters he believed there was still time to reach a deal with creditors but also warned that “an accident” was drawing “dangerously close” as talks between Greece and its creditors remain deadlocked.

Varoufakis accused Eurogroup President Jeroen Dijsselbloem of “focusing only on Greece’s responsibilities” and not those of its lenders, saying he had submitted “comprehensive” proposals that “would solve the Greek crisis once and for all.” The plans included a “fiscal council” to help oversee Greece’s budget. He complained that Greek proposals for a “swap” where the European Stability Mechanism would buy Greek bonds held by the European Central Bank were not discussed at the Eurogroup “for political reasons” despite being “logical.”

He said Athens could not accept lenders’ plans as they would simply increase “already high tax rates” and “reduce benefits to the weakest.”

In a separate press conference earlier, Dijsselbloem appeared downbeat. “No agreement as yet is in sight,” he said. He added there was still a chance to reach a deal but stressed that “very little time remains.” “Greece needs to become financially independent,” he said. “Any deal that simply doesn’t deliver that… would be also a bad deal for the Greek people.” Asked if he could imagine Greece being forced out of the euro, he said, “The way it goes now we’re going in that direction.”

Christine Lagarde, the managing director of the International Monetary Fund, told the same press conference that a resolution to five months of negotiations required “adults in the room,” an apparent dig at Greek government officials. “The IMF teams are available day and night. They stayed for entire weeks in Brussels and waited and are ready to return,” she added, noting that Greece’s proposals “cannot be about smoke and mirrors.” “We are waiting and we hope the next few days will be used by the Greek government to come up with tangible measures.” She added that the Fund would consider Athens in default if it misses a 1.6-billion-euro June 30 debt repayment. “It will be in default, it will be in arrears vis-a-vis the IMF on July 1, but I hope it is not the case, I really do,” Lagarde said. “There is no grace period or two-month delay, as I have seen here and there.”

As uncertainty peaked and amid intensifying speculation about a possible Greek default and exit from the eurozone, deposit outflows from Greek banks continued Thursday.