Shock, drama and nightmare

BRUSSELS - It is past midnight on Saturday when the phone rings on the 13th floor of the European Commission, bringing news that the European Union is facing an unprecedented crisis after last- ditch talks with Greece collapsed.

Only a few hours earlier, Greece's leaders had agreed to continue talks to avoid a default on the country's debts that could force it to crash out of the single currency and even the EU.

But now, Prime Minister Alexis Tsipras has made the shock announcement that any deal with Greece's creditors - the EU, European Central Bank and International Monetary Fund - will be put to a referendum.

In Brussels, a sense of stupor prevails. The decision comes at the worst moment, in the final stage of negotiations when "98 per cent-99 per cent" of the deal had already been agreed, according to a participant in the talks.

The mood is still sombre hours later as EU ministers begin to arrive for their fifth round of discussions in 10 days to end months of cash-for-reforms wranglings.

"This is not the first time that the Greek government has created more and more drama," said Slovakia's Finance Minister Peter Kazimir.

As talks resume, they swiftly hit a key stumbling block: The 18 other members of the euro zone refuse Greece's request to extend its repayment deadline to after the July 5 referendum.

Just another ploy to win time, grumble the EU's negotiators. Greece's Finance Minister Yanis Varoufakis says he plans to seek legal advice on whether the other euro zone states can make a decision without his agreement.

Later, in the packed press room, Dutch Finance Minister Jeroen Dijsselbloem, who chairs the meetings, said that Greece's huge bailout plan, in place since 2012, will finish tomorrow.

Words begin to fly. Irish Finance Minister Michael Noonan warns that the euro zone is facing a "jump into the unknown", while Mr Varoufakis offers a parting warning saying it was a "sad day for Europe".

Officials from the euro zone have started talks on a plan B to deal with the nightmare scenario of Greece's exit, or "Grexit".


A version of this article appeared in the print edition of The Straits Times on June 29, 2015, with the headline 'Shock, drama and nightmare'. Print Edition | Subscribe