Merkel and Hollande dangle €15.5bn carrot in front of Greece to end eurozone crisis

The leaders of Germany and France offered to release billions in frozen aid on Friday in a last-minute push to talk Greek Prime Minister Alexis Tsipras into contentious pension reforms in exchange for filling Athens’ empty coffers until November. The leftist premier’s response, according to a Greek official, was that he could not understand why his country’s creditors were seeking to impose such harsh conditions in return for money to avert imminent default and damage to the euro zone. Chancellor Angela Merkel and President Francois Hollande, whose countries are Athens’ two biggest lenders, held a 45-minute private meeting with Tsipras before the final session of a European Union summit at which they went through details of immediate funding for Greece if it would sign the deal.

Saturday’s meeting is crucial because we are on the eve of a date, June 30, when the Greek authorities have to meet a payment obligation. It’s also crucial because there are parliaments that have to meet if there’s a deal.

Francois Hollande, French President

The creditors laid out terms in a document that went to Greece on Thursday and was seen by Reuters on Friday. It said Greece could have 15.5 billion euros in EU and IMF funding in four instalments to see it through to the end of November, including 1.8 billion euros by Tuesday as soon as the Athens parliament approved the plan. The total is slightly more than Greece needs to service its debts over the next six months but contains no new money. A French source said Merkel and Hollande discussed outstanding differences on reforms Greece needs to accept - centred on pension reform, labour law and increasing value added tax - as well as an extension to Athens’ bailout programme and financing.

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