Varoufakis says Greece needs deal quickly; Obama urges action - as it happened
As pressure mounts on Athens, finance minister Yanis Varoufakis tells audience in Berlin that the crisis can be solved in a night
- Varoufakis tells Berlin how to end the crisis - highlights start here
- On irresponsible borrowers and irresponsible lenders
- Varoufakis: leaders could get deal in one night
- Summary: Obama leads chorus calling for action
6.55pm BST
Some more tasty lines from Yanis tonight:
#Varoufakis in Berlin: We need banks - but it's one thing to save banks& quite another to save bankers. Live here: http://t.co/A0uhKMigKZ
#Varoufakis: "It would be an announcement to the world if our interest payments were linked to nominal GDP growth." #Eurozone #Greece
Gerhard Schick MP of the Greens: We have to think about how awful it is for #Greek citizens - it's not only about budgetary consolidation.
6.26pm BST
6.22pm BST
LIVE Varoufakis: "Greeks need a missing ingredient _ Hope" #Greece pic.twitter.com/AtvQCSUKeP
6.21pm BST
Varoufakis then outlines how Greece needs a Speech of Hope, comparable to the address given by US Secretary of State James F. Byrnes in Germany in 1946.
Byrnes's speech signalled the rebirth of Germany's economy after the second world war; now, Greece looks to Angela Merkel to give a new version, outlining a bold future.
#Varoufakis invites #Merkel to speak in #Greece, in a speech which would signal a change in European politics, if I got it correctly
6.14pm BST
A deal is within reach, Varoufakis tells his audience. It could be hammered out in one evening, one long night. Leaders could just work until 4am and get a deal done.
And it would have some key elements.
Varoufakis speaks about building bridges and quotes Kohl, Delors even Schiuble who spoke of need to complement economic with political union
6.07pm BST
Yanis Varoufakis is now giving a familiar critique of the proposals from Greece's creditors.
Of course the pension system is unsustainable, we want to reform it....Is cutting further a reform? I don't think so. Any butcher can chop something down.
If you continue to squeeze our population into misery, we will not be reformable ever.
We have an historic duty not to allow this to happen.
5.51pm BST
Yanis Varoufakis live in Berlijn: nazis are coming out of the woodwork to flood our cities. pic.twitter.com/Oodf5eh7pj
5.49pm BST
Don't believe the idea that the eurozone is a story of hard-working ants in the north, and lazy grasshoppers in the south, Varoufakis says.
There were hard working ants in Greece, just as in Germany, and they all suffered badly when the debt crisis began.
5.47pm BST
Varoufakis also gives his audience in Berlin a chilling warning of the impact of the depression - a slump comparable with John Steinbeck and The Grapes of Wrath, he says
Children are fainting from malnutrition in their clasrooms, and "Nazis, yes Nazis" are coming out of the woodwork and onto the streets, he says.
5.45pm BST
Yanis Varoufakis is explaining to his audience in Berlin how the creation of the eurozone created a 'tsunami of debt' from banks in Frankfurt, Paris and Amsterdam to Athens, Dublin and Madrid.
This is the theory of 'surplus recycling', where cheap credit flowed to the eurozone periphery to create unsustainable borrowing levels.
For every irresponsible borrower....there was an irresponsible lender.
Varoufakis: every irresponsible borrower has an irresponsible lender - asymmetries hunting the EMU #Varoufakis #Berlin @boeckler_de
5.39pm BST
You can see Yanis Varoufakis's speech in Berlin live here. It's good stuff.
5.33pm BST
One more thing to watch out for tonight: Yanis Varoufakis is now giving a speech in Berlin, at the Boeckler Foundation.
Now the floor is Yanis. Varoufakis starts his keynote. pic.twitter.com/L21oJWxSTs
Yanis popstar! pic.twitter.com/M8nhPaxu3D
5.22pm BST
Time for a recap.
A series of world leaders have piled pressure on Greece to make compromises to secure bailout funds from its creditors, as the eurozone enters one of its most crucial weeks in years.
"The Greeks are going to have to follow through and make some tough political choices that will be good for them long-term."
"Dr Schiuble and I had a long productive conversation....We were not negotiating, we were establishing common ground."
"These are difficult moments for the European Union and the euro zone in particular and it is the duty of elected politicians to take their responsibility to a higher level in order to try to achieve an agreement that is absolutely essential for the integrity of the euro zone, absolutely essential for the European Union and it is a historic duty which we cannot abrogate."
4.36pm BST
Europe's stock markets just closed with losses across the board.
European markets have continued where they left off at the end of last week, as rising bond yields and the continued impasse over a new Greece deal keep investors cautious.
4.31pm BST
The absence of a Greek deal is fuelling fears over the stability of its banking sector.
Rating agency Moody's warned today that bank deposits must have fallen again in May, on top of the a4.9bn that fled the sector in April.
Such capital controls could be in the form of restrictions on deposit withdrawals, such as imposing a daily limit on how much cash depositors can withdraw and on money transfers abroad.
The ECB may indirectly prompt capital controls by limiting the extension of ELA to Greek banks, with an aim to exert pressure on the Greek government to come to an agreement with its official lenders regarding its financing programme.
...what we are all hearing of banks advising [savers] to withdraw money abroad through mutual funds."
"Everything is going swimmingly. People are very calm and actually cautiously optimistic"
4.11pm BST
Christian Noyer of the European Central Bank has made some eye-catching comments on Greece, at an event in Montreal today.
On the one hand, a Grexit wouldn't be a disaster for Europe:
3.53pm BST
Obama: G7 supports efforts to find path enabling Greece to carry out key reforms & return to growth within strong stable & growing Eurozone
3.53pm BST
Investors in Athens are feeling the heat.
The main ATG index slid 2.7% today, closing at its lowest level in six weeks.
3.30pm BST
Obama is also touching on data hacking and the Middle East:
Obama on cyber hacking: We have known about vulnerabilities for long time, vulnerabilities will accelerate over time pic.twitter.com/y7YSA8UPuN
Pres. Obama on fight against ISIS: We must improve the speed of training Iraqi forces. http://t.co/KXWKKJFejI pic.twitter.com/QvgKdDMOsz
3.28pm BST
President Barack Obama is also taking questions at the G7 now, and the first question is on the Greek crisis.
Not only to satisfy creditors, but also to create a platform where the Greek economy can start growing again and prospering.
The Greeks are going to have to follow through and make some tough political choices that will be good for them long-term.
If both sides show sufficient flexibility, we can get this problem resolved....but it will need tough decisions from all involved.
I think that everyone wants to make it happen and they're working hard to get it done.
2.57pm BST
Here's Francois Hollande's warning about on the urgent need to get a Greek deal, from Reuters:
"There is an end-June deadline.....
"This is the latest possible deadline but nothing stops us from going faster and I think it is in Greece's interest to go faster to avoid doubts or speculations. If we want - and all of us, Greeks and Europeans, have said we do - Greece to stay in the euro zone, we must go towards a solution in a timeframe that is not (as late as) the end of the month."
2.44pm BST
Across the G7 summit, French president Francois Hollande has just told reporters that there is still time to reach a deal with Greece.
French Pres Hollande: ECB, IMF, EU Could Make Alternative Proposals To Greece - #BBG
2.37pm BST
My colleague Andrew Sparrow has full details of Merkel's press conference here.
2.28pm BST
A second reporter asks Angela Merkel about Greece -- are G7 leaders worried that the country might default soon?
The German chancellor insists that "Everyone around the table wants Greece to say in the euro".but we have rules."
"The measures proposed by the troika have led to success elsewhere." #Merkel in full trolling mode on #Greece?
2.21pm BST
Some early reaction to Merkel's comments on Greece:
Merkel makes it clear that the creditor proposals (dismissed by Tsipras as absurd) are the only ones on the table
#Merkel repeats the obvious: there is not much time left for #Greece . Who wants could hear a slight tone of impatience in her words.
#Merkel confirms she will meet with @atsipras on Wed in Brussels, but suggested it may not be decisive. #Greece #G7Summit
2.16pm BST
Angela Merkel has warned that "every day counts" in the race to finalise a deal with Greece.
The day after tomorrow we can discuss this with the Greek prime minister at the EU summit with Latin American countries...
Every day counts to complete the necessary job.
1.58pm BST
The G7 summit has broken up, and leaders are speaking to the media now. Angela Merkel's press conference is being streamed here.
1.54pm BST
Iceland's government insists that its plan to relax capital controls is sensible.
Officials at today's press conference are stressing that it will bring "stability", and allow money to move freely again without drastic moves that hurt the economy.
No fewer than 21 mentions of 'stability' in Icelandic govt's announcement of how it'll end capital controls. http://t.co/krwUGsYDjp
1.37pm BST
Despite Jean-Claude Juncker's criticism of Greece yesterday, the Commission hasn't given up hopes of a Greek deal either.
Spokesman Margaritis Schinas explained told a press conference today that the EC will "continue working on a solution"....but with its own proposals as the starting point.
"The proposal submitted by the institutions last week was a good basis for discussion provided that all sides are dedicated to finding a solution to the open issues."
1.21pm BST
Over in Reykjavik, the Icelandic authorities are announcing plans to lift capital controls imposed after the financial crisis.
1.09pm BST
Greek government spokesman Gavriil Sakellaridis also revealed this morning that two senior ministers are heading up negotiations in Brussels today. Another sign of compromise?
State Minister Nikos Pappas and Alternate Foreign Minister Euclid Tsakalotos are leading the government's delegation to the Belgian capital.
#Greece Tsakalotos, Chouliarakis, Pappas fly to Brussels to seek agreement (options?). First two part of BrusselsGroup negotiations team
Brussels source: unconfirmed meeting of Pappas and @tsakalotos with @pierremoscovici today at 16.15
12.56pm BST
Greece is determined to keep negotiating with its creditors over the the next few weeks to get a deal, says government spokesman Gabriel Sakellaridis.
"The mission of the Greek delegation is to explore the possibility of a solution that satisfies both sides."
Greek gov't spokesman Sakellaridis says Tsipras has informed Merkel, Hollande & Juncker that Athens is updating proposals #Greece
Greek gov't Sakellaridis says delegation in Brussels has authority to negotiate changes to proposals Athens submitted to lenders #Greece
12.17pm BST
12.13pm BST
Meanwhile in the UK, rating agency Moody's has warned that David Cameron's plan for an in/out referendum on EU membership could hurt Britain's credit rating.
In a new report, Moody's said that an early vote would raise the chances of Brexit. It says:
"In Moody's view, a shorter time frame increases the risk that the UK government will not manage to secure the changes that it is seeking, which in turn may negatively influence the government's willingness to support remaining in the EU," the agency says in an update on the UK.
"While the outcome of the referendum remains uncertain, Moody's believes that a withdrawal from the EU would have negative implications for the UK's growth prospects and - in the absence of an alternative trade arrangement with the EU that at least partly replicates the current access to the EU's single market - would likely put pressure on the UK's sovereign rating."
Related: Britain leaving EU would affect credit rating, says Moody's
11.44am BST
11.37am BST
Yanis Varoufakis also told reports that the meeting with Wolfgang Schiuble was helpful, and held in an "extremely friendly" manner (Dow Jones reports).
11.31am BST
Yanis Varoufakis has just emerged from his meeting with Wolfgang Schiuble.
He tells reporters that they have held "friendly and productive" talks this morning.
#Varoufakis nach Treffen mit #Schiuble: "freundlich und produktiv." Zugestindnisse? - "We did not negotiate." pic.twitter.com/dJd5HVFs6g
11.04am BST
Europe's stock markets remain edgy this morning, as Brenda Kelly of London Capital Group explains:
With Greek worries still haunting investors with the European Commissioner stating that alternative proposals must be found if a deal is to come to fruition.
It's the last day and yet the G7 leaders have yet to reach a compromise that unlocks bailout aid for Greece. and until accord is reached we can expect market jitters to continue.
10.24am BST
Greek Finance Minister @yanisvaroufakis in Berlin meeting w/ German counterpart #Schaeuble. Had nothing to say going into the talks.
9.57am BST
Yanis Varoufakis has just been sighted in Berlin, arriving for his talks with Wolfgang Schiuble (preview here)
#Varoufakis auf Geldsuche: Gerade in Berlin bei #Schiuble. Ob's hilft? pic.twitter.com/ETcugBQOGY
9.54am BST
Christine Lagarde, the head of the International Monetary Fund, has arrived at the G7 summit.
*FRENCH OFFICIAL: LAGARDE TO HAVE MEETINGS ON GREECE AT G7 TODAY
9.49am BST
Greek newspaper Kathimerini is reporting that the Athens government is redrafting its own bailout proposals today, in the hope of cracking a deal soon.
However, it's only inching towards a compromise, rather than swallowing its creditors demands (not surprising, given the way Alexis Tsipras dismissed them on Friday night).
Kathimerini understands that Athens is focussing its attention on adjusting the fiscal measures it proposed with the aim of getting closer to the revenue target set by lenders. However, the coalition is reluctant to adjust its VAT proposal, which sees three brackets (6, 11 and 23 percent) rather than the two proposed by lenders (11 and 23).
Greece also seems prepared to raise slightly its primary surplus proposals from 0.6 percent of GDP this year and 1.5 percent next year. The institutions proposed 1 percent for 2015 and 2 percent for 2016. The updated suggestion from the Greek side is not expected to reach these targets.
9.28am BST
The Greek crisis continues to drag on European stock markets this morning, pulling the German DAX and French CAC down by over 0.6%.
And that means the DAX is officially in 'correction territory'; having shed more than 10% since hitting a record high on 10 April.
Germany's DAX falls 10% from April high, enters correction pic.twitter.com/ysrzkteevO
9.08am BST
Greek TV stations are reporting that relations between Berlin and Washington have turned increasingly frosty, as Barack Obama pushes fellow G7 leaders for a quick solution to the crisis.
"Whereupon the US official said nothing because, as if always the case according to German officials when it comes to the issue of money, the Americans never say anything".
8.47am BST
France's finance minister, Michel Sapin, has fired a warning shot at Athens this morning by claiming the impact of Greece leaving the eurozone would be pretty trivial.
"It would be no drama for us to see Greece leaving the euro. It would not be serious from a financial or economic point of view"
"However, it would be a blow to the European project, because the European project is not to shrink but to enlarge, not to see members excluded but to welcome more."
#France #Sapin pense qu'un accord sera trouvi(C) mais considire qu'une sortie de la #Grice de la zone euro ne serait pas un drame
8.33am BST
Today's meeting was requested by the Greek side; Yanis Varoufakis is in Berlin to attend another event this evening, so decided to take advantage of this opportunity to visit Schiuble at the same time.
It's an opportunity to repair relations between Greece and the creditors after Tsipras's defiant speech to MPs on Friday night.....
"It was an aggressive move designed to terrorise the Greek government," Varoufakis told Proto Thema daily.
8.21am BST
We have a new deadline to aim for: France wants a Greek deal by Sunday.
#GREECE: GREEK ACCORD NEEDED SOON TO END UNCERTAINTY -FRENCH OFFICIAL - BBG
*FRENCH OFFICIAL: GREEK SOLUTION WANTED BEFORE JUNE 14
I remember when we thought we'd have a deal by June '14 https://t.co/63qG5Aoh5U
8.08am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Fears over Greece's financial plight are building this morning, as we enter a crucial week for Athens and the rest of Europe.
Alexis Tsipras promised that by Thursday evening he would present a second proposal. Then he said he would present it on Friday. And then he said he would call on Saturday. But I have never received that proposal, so I hope I will receive it soon. I would like to have that Greek proposal,.
"I do not have a personal problem with Alexis Tsipras. He was my friend. He is my friend " But frankly, in order to maintain [the friendship], he has to observe some minimum rules."
Related: Jean-Claude Juncker accuses Alexis Tsipras of lying over bailout talks
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