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Solution To Greece's Debt Crisis Remains Elusive


Let's turn now to the ongoing Greek financial crisis. This morning, Greece's prime minister demanded that European creditors provide Greece with a bailout - a bailout that gives hope to his country that its crisis is coming to an end. Alexis Tsipras was addressing a session of the European Parliament. Greece desperately needs the European Central Bank to provide funding to Greece's banks, which are close to failing. Wall Street Journal correspondent Gabriele Steinhauser is in Brussels watching the Greek drama play out, and we have her on the line.

Good morning.


MONTAGNE: Tell us more about what Prime Minister Tsipras had to say this morning.

STEINHAUSER: Well, his speech was short and probably a lot less aggressive than some of the other things he's been saying in recent week. He obviously flew to Strasbourg right after an emergency summit here in Brussels last night in which he was given sort of a final chance to finally present new proposals of what he wants to do for reforming his country until Sunday when eurozone leaders meet again. He did say that he would present detailed proposals and concrete proposals in the next few days, but he still rejected the old bailout program, which will be the basis for any new discussions for new aid. So I think we're still a little bit up in the air to find out what his plans are exactly.

MONTAGNE: Germany is Greece's biggest creditor. Its leader, Angela Merkel, said again yesterday that Greece must carry out reforms. What exactly does she mean, and how does it fit into what's going on here this week?

STEINHAUSER: Yes, Angela Merkel was certainly very, very tough last night. In fact, she didn't say that Greece only needed to implement all the reforms and budget cuts that its voters just rejected on Sunday, in fact she said any new bailout program would need many, many more overhauls and measures because instead of talking about a five-month extension - which is the thing that was on the table until the old bailout expired - they are now talking about a program that would last for two to three years. She for the first time in a long time said, well, yes, we can talk about bringing Greece's debt back to a sustainable level, but only once all the other things are done.

MONTAGNE: Well, sustainable level - it's interesting what that might mean. I mean, Greece clearly cannot pay back its mountain of debt, and given how dire the situation is having - Greece having just defaulted on one big loan, set to default on another, are the creditors even considering restructuring the debt?

STEINHAUSER: Well, they already promised in 2012 that they - once Greece has fully implemented all the measures under its bailout program - that they would look at ways to bring down the debt. What they will not do - which is very clear also after the last few days - is to cut the nominal value of the debt. But what they are talking about is extending maturity.

MONTAGNE: Well, finally, this Sunday deadline - it's just days away to fix a really complicated problem. Is it possible that no deal will get made?

STEINHAUSER: I think it's absolutely possible that no deal will get made. I think people last night that I was speaking to were more optimistic than they had been in recent days, but I feel like a lot of the officials involved in the negotiations, they're having similar mood swings as the rest of us. And the president of the European Commission, Jean-Claude Juncker, said in his press conference last night that, you know, we have our Grexit scenario prepared, and if that's what happens then we'll know what to do.

MONTAGNE: So it may have come to this, Grexit - much talked about, the exit from the eurozone by Greece - could really happen.

STEINHAUSER: Yeah, I mean, I think it has been in the cards there now that Greece has been cut loose from the financial lifelines that have kept it afloat for more than five years, and if they don't get any new money now within the coming days, they're set to default on the European Central Bank on July 20. And that will make it very, very hard to ever reopen the Greek banks with euros in the bank accounts, and it could force the government to start printing its own money. So it's not like they will - other European leaders - will take concrete steps to push them out. It's rather that by not doing anything and by not extending any more loans very quickly, the Greek government may be left with nothing else to do.

MONTAGNE: Gabriele Steinhauser reports for The Wall Street Journal, speaking to us from Brussels.

Thank you very much.

STEINHAUSER: Thank you, it's been a pleasure. Transcript provided by NPR, Copyright NPR.