Germany blinks.
The contours of a deal on Sunday are starting to emerge. Syriza has requested a three-year package of loans from the eurozone bail-out fund (ESM) - perhaps worth as much as €60bn – and is reportedly ready give ground on tax rises and pension cuts.
Germany’s subtle shift in position comes as the United States, France, and Italy joined in a united call for debt relief, buttressed by a crescendo of emphatic statements by Christine Lagarde, the head of the International Monetary Fund. "Greece is clearly in a situation of acute crisis, which needs to be addressed seriously and promptly. We remain fully engaged in order to find a solution to restore stability, growth and debt sustainability," said Ms Lagarde. A report by the IMF said a debt haircut of 30pc of GDP “would be required” to meet the original debt targets agreed in 2012. This could be achieved be stretching out the maturities of bonds to forty years and lowering the interest rate, sparing EMU governments the political pain of having to crystalize direct losses for their taxpayers. The US has clearly lost patience with the Europeans is now bringing its huge diplomatic power to bear, fearing that mistakes in Greece could lead to a geostrategic fiasco and serious damage to the Nato alliance.
The elephant in the room bellows. The Telegraph
Greek deal in sight as Germany bows to huge global pressure for debt relief Ambrose Evans-Pritchard and Mehreen Khan