Greek PM Races to Restart Talks

Greek PM Races to Restart Talks

BRUSSELS (AP) -- With his country struggling to stave off financial collapse, Greek Prime Minister Alexis Tsipras will try to convince European creditors to agree on a new bailout program when they meet Tuesday for an emergency eurozone summit.

Tsipras is set to offer a new plan of economic measures to creditors that he hopes will restart negotiations on getting new loans for his country. The situation is urgent — without a deal, Greece's banks could go bust within days, the first step in the country's potential exit from the euro currency union.

Greece's financial distress became more acute late Monday when the European Central Bank refused to increase assistance for Greek banks, which are not due to reopen until Thursday.

A hastily arranged meeting of eurozone finance ministers, which will be Euclid Tsakalotos' first as Greek finance minister, is slated for the afternoon in Brussels. A full summit of leaders will then follow.

There were few signs of movement in the run-up to Tuesday's meeting.

European Commission President Jean-Claude Juncker tempered expectations of a swift solution.

"Were we to come up with a solution today, it would be an overly simplistic solution," he told European lawmakers in Strasbourg, France. "What we're going to do today is talk to each other, understand each other, show tolerance to each other and restore order to the situation."

The upcoming meetings follow Tsipras' bigger-than-expected win in Sunday's bailout referendum, when 61 percent of Greek voters rejected measures creditors had proposed last week in exchange for loans.

In a sign he may be willing to compromise, Tsipras appointed a new finance minister to lead talks with creditors.

Tsakalotos, a 55-year-old economist, has replaced Yanis Varoufakis, who constantly clashed with his peers.

"I won't hide from you that I am very nervous and very anxious," Tsakalotos said after being sworn in Monday. "I am not taking over at the easiest moment in Greek history."

Greek banks are running out of cash even after the government shut them last week and placed limits on how much depositors can withdraw or transfer.

Normal commerce is now impossible in Greece. Small businesses, lacking use of credit cards or money from bank accounts, were left to rely on cash coming from diminishing purchases from customers. But Greeks are holding tightly onto what they have. And suppliers are demanding that businesses pay cash up front.

Giorgos Kafkaris, a 77-year-old pensioner, was among Greeks standing in line to withdraw cash at an Athens ATM on Tuesday.

"I came to get the 120 euros, I can't take more. The good thing is we had sorted things out earlier and we had 200-300 euros set aside," he said. "I'm waiting for something better for all of us. I believe something better will happen."

Spanish Prime Minister Mariano Rajoy said that if Greece is to remain part of the eurozone, it needs to enact reforms that will spur economic growth and pay off its debt.

"We're inclined to help Greece but Greece must follow Europe's rules," he said in an interview on Spain's Telecinco evening news program.

The euro was down 0.7 percent ahead of Tuesday's meetings, though stock markets were relatively stable in Europe. Greece's stock market remains closed since last week amid the bank closures.

Tsipras has previously indicated he's willing to raise taxes and cut some spending provided the country gets some debt relief.

"The prime minister is ... committed to starting a fundamental debate on dealing with the problem of sustainability of the Greek national debt," a Monday statement signed by the government and three pro-European opposition parties said.

Greece has been granted two bailout programs worth a total of 240 billion euros ($266 billion) in loans from other eurozone countries and the International Monetary Fund. But the spending cuts and tax increases demanded as a condition for the loans have hit growth, causing an economic depression and pushing unemployment to 25 percent. The government, meanwhile, has been slower than hoped in making the economy more competitive and selling state assets to raise money.

European officials remain split on Greece's demand for easier debt repayment — with lead eurozone lender Germany still reluctant.

James Nixon, chief European economist at Oxford Economics, said there's "a narrow trajectory from here that sees an emboldened Greek parliament accepting the need for reform in return for a debt write-down."

"The next 48 hours will be crucial."

(KA)