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SUBSCRIPTION FORM Experts warn about dire consequences of a Grexit Finance Minister: 'Foolish' of Greece to turn down creditors' proposals MIRIAM DALLI JUST hours before its interna- tional bailout expired, Greece yesterday requested a two-year rescue deal with the European Union to save the country. The proposal was for "an agreement with the European Stability Mechanism to fully cover its fi- nancing needs and the simulta- neous restructuring of debt". With the situation evolving by the minute, EU authorities made a last-minute offer to sal- vage a bailout deal that would keep Greece in the euro area. The European Commission urged Greece to accept the pro- posed deal, while holding out hopes that some tweaks could still be possible. With Greece heading towards a bailout referendum, Greek Prime Minister Alexis Tsipras has made his pitch for a 'no' vote; EU Commission President Jean Claude Juncker has urged the Greeks to vote 'yes'. "There's no Europe without Greece," he emphatically said, after claiming he felt " betrayed " by the referendum call. The eleventh-hour Greek pro- posal is "symptomatic" of the Greeks, Finance Minister Ed- ward Scicluna told MaltaToday, adding it would be "foolish " of the Greeks to turn down the proposals of the IMF, the ECB and the European Commis- sion. What is ahead of Greece? And what are the consequences of a Grexit? Our panellists – Edward Sci- cluna, Philip von Brockdorff, Roderick Pace and Gordon Cordina – have their say. Edward Scicluna Finance Minister The new Greek government's mandate to ease the austerity in Greece could have been deliv- ered successfully were it not for a number of strategic mistakes. The emphasis of not talking to the institutions in Athens lost the government four precious months. That time should have been used productively into presenting a home-grown pack- age of much needed reforms, as an alternative to the old MOU. This unprecedented f lexibil- ity had been approved by the Eurogroup way back on Febru- ary 20. The Greek policy makers could have avoided any meas- ures which they did not like and substituted them with others. The current package (aide- memoire) was presented in- stead by the creditors' institu- tions as a last resort only when it transpired that the Greeks' own package was failing to ma- terialise. Given that what is on the ta- ble bears a similarity to the old MOU, the choice is now be- tween strong and painful medi- cine and certain death, in an economic sense. Greece is completely out of oxygen which only the EU insti- tutions together with the IMF can supply. It would be foolish to turn it down. The letter sent about nine hours before the IMF payment deadline (midnight) by the Greek government to the Eu- rogroup and ESM/EFSF presi- dents asking for a two year loan and reprofiling of the debt, so as not to "trigger a technical default", is symptomatic of the Greek authorities' behaviour in this saga. Although it is a legitimate re- quest in the context of an ami- cable settlement of a bailout package, it has to be evaluated in the context of a refusal to abide by the suggested conditions set by the creditor countries. The funds and guarantees within the EFSF/ESM have been paid in by the creditor countries. Philip von Brockdorff Head of economics department at UoM Barring any last minute deal, which cannot be excluded even at this late stage, the referen- dum on Sunday will determine via a democratic vote whether the present government retains the legitimacy to reject the bailout terms or call early elec- tions. Either way the economic un- certainty facing the Greek economy will not go away. The huge debt burden as well as the difficulties to press ahead with structural reform will further extend the period of recession. If opting out of the euro would finally result in some respite for the beleaguered Greeks, then that may be the way forward. However, the economic pros- pects of exiting the eurozone are just as bleak if not worse than remaining inside. Gordon Cordina Economist Grexit is a bit like a game of chicken between Greece and its creditors. Should their cars col- lide at frontal high speed, both will suffer, and by more than each one would, should any one of them decide to give in. To my mind, there remains space for a reasonable solution which would not throw Greece into an economic abyss, and the eurozone and the EU into an ever more difficult politi- cal situation with an ally which may potentially turn volatile. It is now time to move from posturing to effective action, possibly through a solution which does for Greece what the Marshall Plan did for Europe. Roderick Pace Director at the Institute for European Studies A Grexit will end aimless rounds of negotiations which have cost the EU dearly by diverting its at- tention away from more burning issues, such as migration and the security threats in its neighbour- hood. Grexit will hurt Greece most. Its heavily listing economy will capsize. Instead of securing re- prieve from their present hard- ships, the Greeks will be worse off. EU member states will lose what they have lent Greece and will become more wary of ex- tending a helping hand when similar situations arise. Solidarity would receive a mor- tal blow. EMU will suffer from Grexit, but would weather the storm. Greece has stubbornly rejected reform, mistakenly thinking that Europe's patience is infinite and that the rest of the world owes it a living. Compare it with Iceland's and Ireland's recovery. The EU will survive a Grexit, but not before experiencing a rocky and bumpy ride.