Tsipras ready to take responsibility for rejecting aid deal [Update]

Greek Prime Minister Alexis Tsipras said he’s ready to take responsibility for rejecting the terms of a deal on aid if creditors demands are unacceptable.

With a viable solution “the Greek government recently elected by the Greek people will bear the cost of carrying through this difficult agreement,” Tsipras told reporters in Athens on Wednesday. Without one, “we will assume the responsibility to say ‘the big no’ to a continuation of the catastrophic policies for Greece.”

Negotiations between Greece and its creditors are close to breakdown as finance ministers prepare to meet in Luxembourg on Thursday that has been billed by officials as a last chance to seal an agreement on as much as 7.2 billion euros ($8.1 billion) in bailout aid. With creditors despairing of finding a way forward, Greece’s central bank warned of the dire consequences that are looming.

The Athens Stock Exchange erased its gains after the prime minister’s comments, falling 1.5 percent at 3 p.m. in Athens, after dropping more than 9 percent over the previous two days. The index is on track for its lowest closing price since September 2012.

EU exit risk

“Striking an agreement with our partners is a historical imperative that we cannot afford to ignore,” Bank of Greece Governor Yannis Stournaras said in a report released Wednesday. “Failure to reach an agreement would, on the contrary, mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and –- most likely -– from the European Union.”

The speaker of the Greek parliament, Zoe Constantopoulou, refused to accept the report containing Stournaras’s warnings. While the bank’s statute stipulates that the report should be submitted to the assembly, Constantopoulou declined to take possession of the memory stick it was delivered on.

Instead, Constantopoulou, who is a member of the governing SYRIZA party, released a preliminary report on the same day from the “Debt Truth Committee” that she set up, which said that Greece’s debt is “odious” and shouldn’t be repaid.

‘Concrete measures’

Discussions on Greece at Thursday’s meeting will be very short because creditors are still waiting for Tsipras to respond to their proposals, a European Union official said, asking not to be named in line with policy.

With little chance of a deal on Thursday, attention will shift to a summit of EU leaders scheduled for June 25-26 in Brussels, just days before Greece’s bailout program expires at month’s end.

France’s European commissioner, Pierre Moscovici, said that Thursday’s meeting will be “difficult,” but aimed at moving forward. Contentious issues of sales-tax rates, pensions and the budget deficit will be discussed, he said.

“We are waiting for concrete measures,” he said on Belgium’s RTL radio. There is a need for a humanitarian program, he said, “but there must be also a reforms program, because we live in a global, market economy and the Greek economy can’t remain on the margins, like a make-believe economy.” [Bloomberg]