30 June – Eurogroup Teleconference

As Greece prepared to default to two of its creditors, the Eurogroup assesses the first of two expected letters from the Greek government, concerning amendments to the Insitutions' SLA proposal and the extension of the ESM programme.

Thomas Wieser (00:00):

… [inaudible 00:00:00] on the political willingness to agree and to implement. Um, all of this, uh, was focused very largely, uh, around, uh, the question of a new ESM program, uh, which is being applied for. As you said, uh, there is also the issue, uh, of, uh, EFSF, uh, program extension, so as not to be a technical default, uh, today, and I heard nobody disagree, uh, with my assessment, uh, which I think follows on Saturday that today at midnight, uh, the EFSF, uh, program expires. And given what we have heard, not confirmed yet, that has been announced, uh, that Greece will be in default, uh, to at least two creditors, as of, uh, today, or tomorrow, uh, morning. So, my presumption, then there were a few other questions asked, which I’m sure, uh, colleagues will have related, uh, to their ministers [inaudible 00:01:08] big question, uh, is, uh, what, uh, is the [crosstalk 00:01:13] application, what is the practical application-

Speaker 2 (01:15):

Has entered the conference.

Thomas Wieser (01:21):

… of, uh, uh, the, what are changed circumstances. Um, there is also, uh, an issue, uh, which a number of colleagues and institutions mentioned, a pure continuation of the old program [inaudible 00:01:38]. Hello?

Jeroen Dijsselbloem (01:45):

[inaudible 00:01:45].

Thomas Wieser (01:45):

Yeah. Uh, a pure continuation of the present program, uh, in factual terms, obviously not in legal terms, but in factual terms, uh, would also, uh, not appear to be appropriate as the economic situation has changed quite, uh, dramatically. Greece would be in default, uh, the banks foreclosed, and therefore just having more of the same, uh, uh, would appear to be economically just not the right answer to this increasingly challenged situation, uh, where also, uh, the financial sector is under more stress, uh, than it was previously. So that, I would say is the background, uh, to, uh, the discussion around the application, uh, for an ESM, uh, program. Next procedural step, uh, would be your answering letter, uh, to Prime Minister, uh, uh, Tsipras, I think. That’s all for the moment.

Jeroen Dijsselbloem (02:48):

Right, um, let me, um, try and make a proposal on the basis of what I now know. I say that because I’ve been told that the Greek government is preparing a second letter. Of course, I don’t what’s in it, maybe I should give Yanis the opportunity, Yanis Varoufakis, the opportunity to say something about this, um, whether he knows about the second letter [inaudible 00:03:21], and what should be in it. Yanis?

Speaker 2 (03:27):

Invalid entry.

Yanis Varoufakis (03:29):

Yes, can you hear me, Jeroen?

Jeroen Dijsselbloem (03:30):

Yes, I can.

Yanis Varoufakis (03:32):

Okay, good. Uh, the letter that, uh, the second letter that we are preparing is, um, an amended version of the SLA proposal, as, uh, as tabled, uh, on the 25th by the institutions. It is, um, is a result of, uh, discussions with Jean-Claude Juncker, the president of the economic, uh, Commission. And, uh, we are submitting this as, uh, a firm proposal, so that colleagues can, uh, take a look at the prior actions that the government of Greece is prepared to, to undertake.

Jeroen Dijsselbloem (04:20):

Uh, so that, that sounds like you will put forward new proposals, amendments to the last proposals by the institutions.

Yanis Varoufakis (04:30):

Uh, yes. Uh, i- I have to emphasize that, uh, the amendments that we’re proposing, compared to the institutions’ SLA proposal par- prior actions list, are quite, uh, uh, concise, and [crosstalk 00:04:47], uh, th- th- they’re limited changes. Uh, so in a sense, we are very close to the institutions’ SLA proposal.

Jeroen Dijsselbloem (05:00):

Um, okay, well it, it’s very hard for us to assess a letter which we don’t have, so, um, there are two options. Either we briefly discuss the first letter, and take a, sort of, preliminary stance on that, uh, or we wait for a second letter, and have a call later this evening. Um-

Yanis Varoufakis (05:23):

I believe that, uh, [Declan 00:05:25] Costello has actually received the letter already from our technical team. Let me just say very briefly that, uh, there are s- some minor changes, uh, which c- represent, uh, very, uc- fair compromises, um, on, uh, the VAT rate that applies to utilities, uh, with regard to privatization, and, uh, the functional separation that is of the electricity provider. Um, the a- the, the, the, the areas that we’re covering are pensions and labor markets, and that’s about it. But I believe that Declan Costello already has a copy.

Jeroen Dijsselbloem (06:13):

Um, you may also want to hold on to the second letter, and allow for some reflections from the Eurogroup, uh, first.

Yanis Varoufakis (06:22):


Jeroen Dijsselbloem (06:23):

Uh, but it’s up to… Uh, make, um, few remarks on my side, and then I’ll open the floor to ministers. First of all, what the, the talks were, uh, stopped untimely fashion, uh, by the Greek authorities, uh, and a different plan was proposed, to have a referendum with a no advice. My understanding is that this plan is still on the table. In the first letter there is no reference to stopping the referendum, or changing the stance of the government on the referendum.

Yanis Varoufakis (07:01):

Well, ye- no, no [crosstalk 00:07:02] on this issue, of course, we are going to change the stance of the government, uh, if there is progress in today’s meeting. Uh, especially if the SLA becomes more palatable politically for us, in a way which is consistent, of course, with the institutions’, uh, logic, it would be possible for us to change our stance, and recommend to the people that, uh, they vote yes. As I’ve said repeatedly in the past, also in press, in the press conference after our Saturday meeting.

Jeroen Dijsselbloem (07:37):

Right. Um, colleagues, I think, uh, it would be best to wait for this second letter, uh, [inaudible 00:07:44] won’t have a very useful, uh, discussion, uh, the program expires tonight, I don’t see, practically nor politically, how we can change that course of action. Um, and regarding any other proposal for the future, we would have to wait to see that, uh, second letter. So, my proposal will be to [inaudible 00:08:11], uh, and hour after the second letter has come in, we will distribute it as soon as I have it, uh, and then talk.

Wolfgang Schäuble (08:21):

Uh, if I may, [inaudible 00:08:25]-

Jeroen Dijsselbloem (08:25):

Yes, [inaudible 00:08:26].

Wolfgang Schäuble (08:30):

… agree on a c- a conference call tomorrow, because, uh, we can’t, uh, stand a- aside and waiting whether we get a, a, a second letter, or a third letter, maybe a fourth letter, when this first letter has been announced publicly. Uh, we have discussed it in our parliamentary talks, my party, m- our coalition partner, we have discussed, we had common discussion on the level of the Chancellor, the Vice Chancellor, he agrees that, before the referendum, we will not regard, uh, any, any, uh, decision. So, second, without IMF involvement, we will not regard any, uh, uh, ongoing discussion. And my third remark is, in this letter we got in the meantime, from the Prime Minister, the last sentence is a declaration which is absolutely not in line, uh, with what has been the precondition, because if Greece is only, uh, committed to sell, to sell it’s external debt, in a manner [inaudible 00:09:39] that secures [inaudible 00:09:39] that is not, uh Greece’s, uh, del- uh, committed to sell, sell its, its external debt fully and timely, what is the precondition for any, for any even starting of thinking about.

Wolfgang Schäuble (10:00):

By the way, the HFSF program will end tonight, [inaudible 00:10:06] because [inaudible 00:10:07] the announcing, uh, announcement of the Prime Minister is in default, and the rules of the IMF, and, uh, so we are [inaudible 00:10:17] has mentioned that that has been mentioned by Thomas Weiser, is only recommend to the gr- authorities in Greece to regard [inaudible 00:10:25] article 30. Yeah, but we should agree on a c- on a, on another call, uh, not before tomorrow, because it makes no sense. It’s hours and hours when we get the next letter.

Michel Sapin (10:37):

Jeroen, Michel Sapin.

Translator (10:41):

Jeroen, Michel Sapin speaking.

Michel (10:51):

Jeroen Dijsselbloem?

Translator (11:06):

Jeroen Dijsselbloem?

Jeroen Dijsselbloem (11:06):

Go ahead, please, go ahead.

Michel Sapin (11:08):

Yeah, okay. Um, [French 00:11:18].

Translator (11:17):

Uh, I think, I think your proposal is the right one. Uh, we need to know very, very precisely what’s the content of the second letter, in detail, and we also n- need to know what’s, uh, what’s the political background of, uh, of this letter. What is, uh, what is the commitment by, by the Greek government, vis-a-vis the referendum.

Michel Sapin (11:38):

[French 00:11:38].

Translator (11:40):

But, uh, if, if these proposals seem realistic, and, uh, and can be accepted with the, by, by the institutions, and if the political context has sufficiently changed, then, uh, we shouldn’t deprive ourselves of the possibility of a debate, and the possibility to find a solution.

Michel Sapin (12:24):

[French 00:12:24].

Translator (12:24):

So, Jeroen, uh, [inaudible 00:12:30] a position which is for the letter, and, uh, to, to understand the political context, to then resume our, our discussion.

Pier Carlo Padoan (12:43):

Jeroen, [Pier Carlo 00:12:45] here.

Jeroen Dijsselbloem (12:45):

Pierre Carlo, go ahead.

Pier Carlo Padoan (12:48):

Uh, I also share the view that we should wait for the second letter. Uh, can I, if I may, uh, offer a suggestion to our Greek colleagues, that second letter should be as detailed as possible in terms of, of measures, of suggested measures changes. Also, I agree with Michel, that we, we should like to understand a bit better what the political context is, with respect to the referendum, and with respect to what the Greek authorities recommend voters to, to choose. I, so I suggest that we, we wait for the letter, and maybe we reconvene tomorrow.

Jeroen Dijsselbloem (13:23):

Okay, anyone else at this point?

Luis de Guindos (13:27):

Yes, uh, Jeroen, Luis de Guindos.

Jeroen Dijsselbloem (13:29):

Luis, go ahead.

Luis de Guindos (13:30):

Well, uh, you know, uh, with respect to the first letter that, uh, you know, it’s the letter that we have, uh, available, and that we can an assessment, I think that, uh, the letter requests, uh, three things from us. The first one is an ESM program. The second one is an extension of the program. And the third one is the restructuring, and re-profiling of the debt.

Luis de Guindos (13:51):

Uh, well, the ESM program, uh, everybody, everybody knows that, uh, you know, there is a lot of requirements, and, uh, it’s time consuming. Uh, with respect to the extension of the program, I think that we all rejected an extension of the program last Saturday. I don’t know what, uh, has been modified from our stance last Saturday. And the third one, the re-profiling, the restructuring of the debt is something that is extremely, extremely delicate, as everybody knows. And I fully agree with, uh, with, uh, Wolfgang, that, uh, you know, the last sentence of this letter is, uh, is, uh, you know, totally unacceptable.

Luis de Guindos (14:27):

So, my point is very clear, I think that this letter has nothing to do with technical, with technical aspects. Uh, I think that, uh, the person who has written that this, uh, the, the, the, the, the, the President of the Greek government, the person who has written this letter, uh, you know, uh, knows perfectly that, uh, this request cannot be, cannot be accepted by us. I think that this is a political letter. It’s setting, you know, the political stance of the Greek government with respect the referendum that theoretically is going to take place this, uh, Sunday.

Luis de Guindos (14:59):

So, uh, uh, I think that, uh, this is the point, with respect to the second letter, you know, I am totally open to discuss, and I hope that we will be able to discuss to tomorrow, but, uh, I think that we should have a clear position with respect to the first letter, that I will be, I think that it’s not a technical one, because the things that are included here are totally impossible, you know, to accept today, but a political, a political, uh, you know, stance, that, uh I fully respect, but I think that is not our mission to assess in this moment.

Alexander Stubb (15:30):

Jeroen, Alex, from Finland [crosstalk 00:15:31].

Jeroen Dijsselbloem (15:32):

Alex, go ahead.

Alexander Stubb (15:33):

Very briefly, exactly the same points that were put forward by Wolfgang, uh, and then later on by Luis. As far as the first letter is concerned, uh, request number one, ESM would take a long time, and would probably need extensive conditionality, because we’re talking about a two-year extension. Uh, then the extension of EFSF, we rejected that, and we continue to reject it. Uh, and then a restructuring of the debt, uh, ah- we are not able to discuss that at this particular moment. I agree, this is a political letter, not a technical letter, and we can discuss further, when we get a second letter, and I would also propose to do that at some stage, uh, tomorrow.

Jeroen Dijsselbloem (16:24):

Okay. Can I just, uh, step in? I think, I’ve been listening to you [inaudible 00:16:29] uh, I think so far this, uh, what you’ve said is there is no basis in this letter to reconsider our position of last Saturday, that means that the time pressure tonight is, uh, is gone, uh, also for practical reasons, I think it’s impossible to go back to the question of the extension of the program. It will expire, and any further discussion will have to be, if any further discussion, it will have to be on a, a new, uh, kind of program. Having said that, um, I think we shall, uh, await the second letter, to see whether there is a different political message in that letter, and I will set up a second meeting tomorrow, uh, after we’ve assessed the second letter.

Yanis Varoufakis (17:16):

Jeroen, may I interrupt, inter- may I interject for one second?

Jeroen Dijsselbloem (17:17):

Yes, you may.

Yanis Varoufakis (17:18):

Thank you, Yarun. I would like to say that there, there are two separate issues here. One concerns the letter, the second letter. And the second issue concerns the willingness of colleagues to contemplate the logic of our request. Regarding the l- the letter, let me just m- yet again say that it has been sent. It is only one page long, because the rest of it is exactly as in the Juncker proposal for the SLA. So, um, Pierre Carlo, I understand your need to have a detailed account of our proposals, but the essence of what we are saying is, uh, pretty much as that of the institutions’ SLA, and the amendments we are proposing are no more than one page, which has already been sent.

Yanis Varoufakis (18:12):

And regarding our stance on the referendum, as we’ve said, we are perfectly prepared to change that stance. On the question of, um, the last sentence in the Prime Minister’s letter, we are equally prepared to change the wording, uh, to, to being, not only fully committed, but also in a timely fashion, to service, uh, the Greek government’s debt, and its obligation to its creditors. We are also quite willing to change the wording in a way that complies with the requirements of the Eurogroup.

Yanis Varoufakis (18:51):

The second issue, which I mentioned, uh, r- right at the beginning, which concerns the logic of our request, that’s a, I think the more serious issue, and this is where, uh, from what I’ve heard, colleagues are reluctant, either reluctant to have a discussion about it, or they think that this is, uh, in- that this is a difficult juncture at which to settle the issue, and it concerns, for instance, the idea of a new e- ESM program, uh, of the re-profiling of the debt request, of the extension of the EFSF, that ale- Alex, for instance, uh, and others rejected as a notion, and the, uh, presence, or absence in the new contract of the International m- mon- Monetary Fund.

Yanis Varoufakis (19:36):

So it, it, but I think that, given how critical this moment is, and in view of the pressures of time, it would be good to have an opinion, separately from the, from the letter, which, as I said, has already been sent, it’s a very short letter, uh, regarding the SLA, um, y- l- why can’t we just imagine that this is not an issue, and then s- center upon the question of whether the, the, the four points I mentioned, of the logic of what we are proposing for a new program to begin from now, uh, whether they are at all palatable to colleagues? Because if that is not the case, then the second letter is neither here nor there.

Jeroen Dijsselbloem (20:19):

Um, Yanis, I, I find it very difficult, and rather theoretical to discuss, uh, a second letter, or an amended first letter, or both, that I don’t know. Um, you have to realize that the practical constraints, legal constraints, and political context, there is no possibility to return to the question we answered Saturday, about the extension of the program. The program, unfortunately to say, will expire tonight. Uh, practically we cannot change that, legally, it’s impossible, given procedures, politically the context, as we speak, has not, has not changed. So, uh, I repeat that my proposal will be to have a second tomorrow, take very seriously, uh, the letter, and any second letter also, but we would have to see it first, to be able to have an opinion on it. So you can’t really ask an opinion now, on the basis of documents that we don’t have, or that you will amend.

Yanis Varoufakis (21:26):

I appreciate that, Yarun. Can I just ask you a question? Uh, if the, let- let’s imagine that that, that the one page that has already been sent to Declan Costello, was in front of everyone, and you could look at it, would you still ho- be of the opi- opinion that this program needs to expire, and we should talk about, uh, our request tomorrow?

Jeroen Dijsselbloem (21:46):

Yes. Because, um, uh, if undest- understand you correctly, your second letter has new detailed, changed proposals, the normal procedure would be that you would talk about these with the institutions, try to get an arrangement on the whole thing, then come to the Eurogroup, etcetera, etcetera. We don’t have the time for that, it’s simply impossible. Second point, the political context is that, uh, [inaudible 00:22:12] a referendum was called with a negative advice, and so far I don’t believe your government has revoked negative advice.

Yanis Varoufakis (22:22):

But we would only do that, of course, and, and happily do it, if we have an understanding that the logic of our proposal, at least broadly speaking is in tune with the feelings of colleagues in the Eurogroup. [inaudible 00:22:44].

Yanis Varoufakis (22:49):


Yanis Varoufakis (22:54):

[foreign language 00:22:54].

Speaker 2 (23:16):

You’ve reached your teleconference, please enter star, your room-

Speaker 2 (23:24):

To join the meeting, please enter-

Speaker 2 (23:31):

Please say your first, and last name.

Yanis Varoufakis (23:34):

Yanis Varoufakis.

Speaker 2 (23:40):

You are joining the meeting.

Speaker 11 (23:41):


Yanis Varoufakis (23:41):

Yanis Varoufakis.

Speaker 11 (23:47):

… uh, in any case, uh, uh-

Speaker 2 (23:48):

Has entered the conference.

Speaker 11 (23:51):

Uh, in any case we stand ready, uh, to work very intensively, and to do, uh, all the necessary assessments, as quickly as we can, uh, and provide them with more information on, uh, on the next, uh, conference call. Uh, actually Pier also wanted a couple of words [inaudible 00:24:09].

Pier Carlo Padoan (24:09):

Yes. Just, j- just to add that, uh, a- as Yanis said there, Declan Costello received the letter at the very beginning of this, uh, meeting, and we have not got the time to analyze it, that we are ready, uh, with the other institutions to prepare, analyze this, and then an assessment for, uh, further, uh, call, that you may reconvene, uh, that, uh, we, uh, n- understand that member states are, are not willing to extend the HFSF program, so w- we have to discuss about something which is new. Uh, and in order to get there, we need, I think, two things. First, [inaudible 00:24:51] technical assessments of those proposals, which are different, uh, a- and second, a very clear political stance, uh, uh, from the Greek government on the issue of the referendum. Uh, so, uh, I think it’s careful, uh, under all those conditions to, to, to reconvene another call, with the spirit to, to, to, to find a solution but also with the legal framework [inaudible 00:25:15].

Jeroen Dijsselbloem (25:17):

Thank you Pier, thank you [inaudible 00:25:19]. Uh, this doesn’t change my proposal, uh, but it’s very welcome, that of course the, the Commission, and hopefully also the IMF would be prepared to look at, uh, uh, any letters coming in, give us an assessment, or a first assessment tomorrow, uh, next call that we may have. Um, that’s how I see the situation. That would actually, uh, also formally request for financial support to the ESM, the first step is that the Commission, jointly with the ECB, uh, assesses some of the aspects that Thomas Weiser mentioned, and the IMF on debt issues, also. That, that is also the formally, the first step in the procedure, when a country, a member state requests for financial [inaudible 00:26:09].

Jeroen Dijsselbloem (26:10):

Uh, we will hear from, from the institutions tomorrow morning, uh, on their assessment, um, but if, I will give the floor once more to ministers, if they agree with my proposal, then we will have a second call tomorrow morning, uh, realizing, uh, of course that [crosstalk 00:26:30] Saturday remains unchanged.

Jeroen Dijsselbloem (26:37):

Okay. So, thanks a lot everyone, um, uh, I will let you know as soon as possible what time this call, tomorrow morning, will take place. [crosstalk 00:26:47]. Thank you.

Luis de Guindos (26:48):

Thank you.

Pier Carlo Padoan (26:49):

Okay. Bye, bye.

Yanis Varoufakis (26:51):


Jeroen Dijsselbloem (26:51):


Yanis Varoufakis (26:59):

[foreign language 00:26:59].

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