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GREECE

Greece faces ‘chaos and riots’: French bank chief

Greece will descend into "riots and chaos" if no deal is found, France's central bank chief warned on Wednesday – the day after Europe's leaders agreed to give Athens until Thursday to come up with "serious" proposals.

Greece faces 'chaos and riots': French bank chief
The manager of a national bank branch hands out priority numbers to pensioners. Photo: AFP

Greece could descend into “chaos” unless a deal is found soon, the head of the French central bank Christian Noyer said on Wednesday.

“The Greek economy is on the edge of catastrophe. A deal absolutely must be [made] on Sunday because it will be too late after that and the consequences will be serious,” he told French radio, adding that “there could be riots… and chaos in the country”.

Noyer said it was “impossible” to re-open Greek banks while confidence was so low, saying there would be an “immediate run” on tellers.

The head of the French central bank is a member of the European Central Bank (ECB)'s decision-making governing council. 

Noyer's warning came a day after European leaders held an emergency summit in Brussels to try to thrash out a deal to stop Greece crashing out of the euro.

Noyer said Greece’s ECB lifeline, which has stretched to €89 billion in recent months, could not be carried on indefinitely.

“We have rules and we have interpreted the rules to their limit to maintain a lifeline to Greek banks, but we cannot continue indefinitely to increase the risks we are taking,” he said.

However, the summit failed to resolve differences and another one has been tabled for Sunday.

Greece's government must offer a new package of reform proposals by Thursday in advance of a meeting of eurozone finance ministers on Saturday and the full leaders' summit on Sunday.

Speaking after the summit, French president François Hollande said Greece still needs to make “credible and serious proposals” that prove it wants to remain part of the 19-nation eurozone.

The French leader spoke to reporters late on Tuesday after an inconclusive summit meeting of eurozone nations.

Respecting the rules, Hollande said, “is a condition of living together.”

“What's at stake is to know the place of Greece in the European Union and thus the eurozone,” Hollande said. “Today, there is no more time to waste.”

The eurozone had expected Greece's newly appointed finance minister, Euclid Tsakalotos, to submit new reform plans on Tuesday after Greeks voted in a referendum Sunday to reject creditor demands for more austerity in return for fresh EU-IMF bailout funds.

When the proposals were pushed further into the week, European Commission President Jean-Claude Juncker warned “we have a 'Grexit' scenario prepared in detail” if no deal is reached, although he insisted he wanted Athens to stay
in the single currency.

German Chancellor Angela Merkel, meanwhile, warned Greece would need a debt programme lasting “several years” to revive its moribund economy and insisted writing off any part of its 320-billion-euro ($350-billion) debt mountain was
out of the question.

The EU's economic affairs commissioner Pierre Moscovici said an agreement with Greece was possible, but that it was up to its government to make credible proposals to its fellow eurozone members.

“I think a solution must be found by Sunday and I believe it can be,” he told France 2 TV, adding: “The ball is clearly in the Greek authorities' court.”

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EUROPEAN UNION

Macron outlines plans to ‘rebuild’ Europe on Greece trip

French President Emmanuel Macron sketched a plan to "rebuild" the European Union through wider democracy and public accountability at the start of a two-day visit to Greece on Thursday.

Macron outlines plans to 'rebuild' Europe on Greece trip
Macron gives a speech on Pnyx Hill in Athens. AFP
Choosing a symbol of ancient Athenian democracy — Pnyx Hill — for his speech, Macron said he intended to present fellow European leaders with a “roadmap” to fix Europe for the next decade.
   
“Our generation can choose to (do this)… we must find the strength to rebuild Europe,” said the 39-year-old centrist, making his first visit to Greece as president.
   
“We share a history and a destiny… we must defend this heritage,” Macron said, with the brightly lit Acropolis as his backdrop.
   
The proposals, which formed part of Macron's election campaign platform earlier this year, would be submitted to European citizens early next year for a six-month debate.
 
READ ALSO:
The Macrons listen to the speech of the Greek Prime Minister on the Pnyx hill. AFP   
 
They include cross-state candidate tickets for the next European Parliament elections, scheduled for 2019, and more democratic legitimacy for the eurozone.
   
“Let us put together a eurozone parliament which would enable the creation of democratic responsibility,” the French president said.
   
At present, economically weak states such as Greece decry the powers wielded by eurozone finance ministers to determine long-term fiscal policy.
 
Their body, the Eurogroup, is not elected.
   
The former economy minister and banker argued that losing the EU would be “a form of political and historic suicide,” especially at a time when only a united bloc can protect its citizens from cross-border threats such as climate change and terrorism.
   
But also, only Europe had a tradition of respecting human rights, equality and social justice, he claimed.
 
IMF must show 'good faith' to stay on
   
Earlier Thursday, with Greek Prime Minister Alexis Tsipras at his side, Macron delighted his hosts by warning the International Monetary Fund to refrain from demanding cuts beyond those already agreed, in upcoming talks.
   
“The IMF's position should be in good faith and without added requirements,” Macron said as Greece prepares to reopen reform talks in return for another tranche of bailout cash.
   
Greece's third rescue programme, currently financially supported by EU states alone, runs to August 2018.
   
The IMF has said it will only contribute to the programme if EU creditors take further steps to lighten Greece's debt load, which has yet to happen over strenuous objections by Germany.
   
Macron on Wednesday bemoaned that the EU had to turn to outside assistance in the first place to rescue Greece in 2010, noting that this reflected a “lack of confidence” between European member states and institutions.
   
“I don't think that having the IMF supervise European programmes is a good method… the credibility and sovereignty of Europe justified doing things differently,” Macron said.
   
Macron said European rescues were not the IMF's “primary vocation” and that in Greece's case, European ministers spend an excessive amount of time agonising over growth forecasts 25 years into the future, at the global lender's behest.
   
“If you could tell me my own country's growth forecast in three years I'd be happy,” he quipped.
   
Greece, on the receiving end of two multi-billion euro rescues in which the IMF has been a part since 2010, has frequently complained of the Washington-based lender's demands for fiscal cuts and labour reform.
   
But Germany in particular has insisted on retaining the IMF, at least in a supervisory role.
 
Turkey 'essential' on migration, terror
 
Macron also had a word of caution to German Chancellor Angela Merkel, saying the EU had to avoid any sharp break with Turkey.
 
“I wish to avoid a rupture because (Turkey) is an essential partner in many crises we jointly face, specifically the migration challenge and the terrorist threat,” Macron told Kathimerini newspaper.
   
Merkel said over the weekend that she would ask the EU to call off membership talks with Turkey, adding “I don't see them ever joining”.
   
The EU and Turkey last year sealed an agreement which has helped to stem the flow of hundreds of thousands of refugees and migrants into Greece.
   
Ankara has threatened to rescind the deal at times when tensions have flared with Brussels over human rights.