European Parliament President is for keeping Greece in Eurozone

YEREVAN, JULY 7, ARMENPRESS. Greece risks a collapse of the medical system, power black-outs, and an import blockade, if the Greek people reject creditor demands in a make-or-break referendum, the EU's highest elected official has warned. As Armenpress reports citing “Telegraph,” Martin Schulz, the president of the European Parliament, said the EU authorities may have to prepare emergency loans to keep basic public services functioning and to prevent the debt-stricken country spinning out of control next week. "Without new money, salaries won't be paid, the health system will stop functioning, the power network and public transport will break down, and they won't be able to import vital goods because nobody can pay," he said. Mr Schulz earlier called for the elected Syriza government to be replaced by "technocrat" rule until stability is restored.

The alarmist warnings are part of an escalating pressure campaign by European leaders as Greeks decide their destiny in what has become – despite attempts by Syriza to present it otherwise - an in-out vote on euro membership after five years of economic depression and mass unemployment. Yanis Varoufakis, the Greek finance minister, said his country is on "war-footing" and accused the eurozone of trying to terrify Greek voters into submission. "What they're doing with Greece has a name: terrorism. Why have they forced us to close the banks? To frighten people. It's about spreading terror," as Armenpress reports, he told El Mundo. The complete break-down in trust between Syriza and the EU-IMF inspectors comes as polls show the "No" side neck and neck, each driven by powerful emotions in the bitterly divided country. An estimate 40,000 people gathered for a rally for "No" side on Friday in front of the Greek parliament, drawn by a star-casting of Greek singers and defiant appearance by premier Alexis Tsipras.

Some 18,000 thronged a nearby stadium for the "Yes" campaign, blowing whistles and waving Greek and EU flags, many afraid that Greece would be blown out of the EU altogether after 34 years, and cast into oblivion. The crisis has reached a point where the Greece's manufacturing system is grinding to a halt. Crucial imports and raw materials have been stuck in ports since imposition of capital controls and the shut-down of the banking system a week ago. Industrialists cannot pay suppliers outside the country unless they are deemed a top priority by an emergency payments committee at the Greek treasury. Hundreds factories and mills may be forced to close down as soon as next week. Mr Varoufakis angrily dismissed "malicious rumours" that Greece's banks are drawing up plans to seize a share of all deposits above €8,000 in a so-called "bail-in". This is far below the EMU-wide deposit guarantee of €100,000. The claims have been widely aired by Greek television and the conservative press, though no sources have been identified. Louka Katseli, the head of the Greek banking association, said the reports were fiction. The situation is clearly desperate, however. Mr Varoufakis told the Telegraph earlier that Greece's banks will run out of cash over the next two days. "We can last through to the weekend and probably to Monday," he said. Greeks were still able to withdraw €60 a day - in reality down to €50 – with local cards from ATM machines earlier today. Foreign cards have no limit but it is far from clear whether that can continue.

Mr Varoufakis appears ready to sit out a long siege if necessary. "We have six months stocks of oil and four months stocks of pharmaceuticals," he said. The finance ministry is allocating much of the country's scarce liquidity for imports of food to avert a disaster as the tourist season reaches a crescendo. He said there is no risk of food shortages. Romano Prodi, former chief of the European Commission and Italy's ex-premier, said it is the EU's own survival that is now a stake as the botched handling of the Greek crisis escalates into a catastrophe. "If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?" It has emerged that European members on the board of the International Monetary Fund tried to suppress the publication of a report by the IMF showing that Greece's debt is "unsustainable" and that the country is in grave need of debt relief. This validates the claim by Syriza that a deal without debt restructuring fails to go to the root of the problem, and merely ensures another crisis later. Angry staff members at the IMF leaked parts of the paper to the German press, forcing full publication. The EMU creditors have so far refused to offer any debt relief. The danger is that this hard line will backfire, forcing Greece to default on an estimated €340bn of liabilities to the eurozone system. This would entail vastly greater losses for the creditors.

As Armenpress reports, citing “EU Reporter,” it was particularly mentioned in the speech by Martin Schulz:

“Ladies and gentlemen,

We all have been following the negotiations between Greece and its partners very closely this week. The European Parliament hopes, that a compromise will be reached today; one that will keep Greece in the Eurozone and pave the way for improving the sustainability of Greek debt. The Greek people have made enormous sacrifices. And the partners have made substantial concessions. Now it is upon the Greek government to take the stretched-out hand of its partners.

Some so-called scientific experts and advisers have claimed that a ‘Grexit’ would only have marginal fallout. No one knows if they are right. But they will not be hold accountable for their predictions. Contrary to us who are sitting around this table, and who have to take responsible decisions we can defend towards our citizens. Therefore, we are called upon to carefully weigh the risks and choose the path least likely to make citizens liable for a crisis they have not caused. If a solution is found today, we will still need to work with Greece on a sustainable future.

Ladies and gentlemen,

A few days ago, I was in a small village in Luxembourg, Schengen, together with the President of the European Commission, to celebrate the moment, thirty years ago, when France, Germany, the Netherlands, Belgium and Luxembourg first sowed the seed of our area without internal borders. Our children, and indeed their children, now take it for granted that one can drive through a border crossing without even realising it; so do hundreds of thousands of commuters, our voters, who pass borders daily on their way to and from work. But this heritage is more than ever at risk from those who want to turn back the clocks. And every day, the high migratory pressure at our external borders puts into question the imperfect EU framework we have in place. We need to keep a cool head and look for constructive solutions. We opened the borders, now we need the common asylum and migration policy that goes with this.

Those who tell people that migration is a problem which can be solved by closing the borders are not telling the truth. Responsibility means all member states playing by the same agreed rules and avoiding any unilateral actions. I urge the Commission to investigate swiftly in case of any doubts. I believe we are fortunate enough to have a European Commission with the courage to put solutions on the table, starting with emergency measures on relocation and resettlement, together with a further package of measures, which we in the European Parliament have been calling for. Voluntary or intergovernmental schemes have been tried in the past and have failed. If this is to work, it must be mandatory and every Member State must take its fair share, otherwise real solidarity quickly turns into mere charity. Furthermore, we are talking about an emergency situation, so I urge your ministers to proceed quickly".