Tags: greece | bailout | criticism

Eurozone Express Hopes That Greek Criticism Will Bear Fruit

Saturday, 25 Apr 2015 09:21 AM

RIGA, Latvia — Greece's European creditors sought to douse talk that they are making plans for a potential Greek exit from the euro and expressed hope Saturday that recent criticism may prompt the country to push ahead with an economic reform plan needed to unlock rescue loans.

In the Latvian capital of Riga, the eurozone's top official, Jeroen Dijsselbloem, said he hoped "some extra urgency" will be injected into the process following the "critical" meeting of the eurozone's 19 finance ministers the day before.

Greece's Yanis Varoufakis was rebuked for failing to come up with a list of economic reforms, which are needed so Greece can get money it needs to stay solvent and avoid a potential exit from the euro.

"But it is going to take a couple of days at least," Dijsselbloem said.

Just two months ago, Greece secured an agreement from the eurozone to get the remaining money in its bailout fund — 7.2 billion euros ($7.7 billion) — but only if it came up with mutually agreed reforms.

But with days to go, Athens has yet to present a full list, prompting Friday's criticism of Varoufakis and the effective abandonment of the deadline.

"Yesterday, we spoke of an A plan, of 'the' plan, because there is no plan B, C, D, or E," said French Finance Minister Michel Sapin. "There is only one plan, and that's Greece in the euro, Greece in Europe."

Wolfgang Schaeuble, Germany's finance minister, said it doesn't make any sense to engage in talk of a plan B but noted that history has a way of working out in a surprising manner. He even harked back to 1989 when any talk about German reunification would have been considered "crazy" — within a year of the fall of the Berlin Wall, Germany was reunified in October 1990.

Though acknowledging "anxiety" among his peers, Varoufakis has sought to portray the impasse more positively, noting progress on issues such as privatization, reforming the tax system, judiciary and bureaucracy.

All sides agree the clock is ticking. The next possible date for a deal could be May 11, when euro ministers meet next and just one day before Greece owes a big payment to the International Monetary Fund.

"We should move faster, because time is running out, financial difficulties are there as well as the commitments made," said Pierre Moscovici, the European Union's top economic official. "Greece must remain in the eurozone."

Greece has relied on 240 billion euros in bailout loans since May 2010 from its euro partners and IMF after it was locked out of international bond markets amid concerns it was insolvent.

In return for the cash, successive governments have had to make savage spending cuts and economic reforms. But while the measures have focused on improving public finances, they have also hurt the economy and caused unemployment to skyrocket.

The current government, which is dominated by left-wing Syriza, was elected in January on a promise to end such so-called austerity. Its focus is on fighting corruption, reforming the public sector, and improving the porous tax system.

The prevailing view in markets is that a deal will be reached in time to avoid a Greek debt default, but only when the pressure on the country becomes unbearable — for example, when the government is out of money to pay its debts or the banks start seeing deposits running dry due to withdrawals by worried savers.

The decision this week by the Greek government to scrape together spare cash from municipalities and state enterprises like hospitals and the national gallery is likely to buy some time. The move — which Greek lawmakers formally approved in a vote late Friday — could, according to independent estimates, rake in 2 billion euros, which would cover its debt payments in May, including to the IMF.


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Greece's European creditors sought to douse talk that they are making plans for a potential Greek exit from the euro and expressed hope Saturday that recent criticism may prompt the country to push ahead with an economic reform plan needed to unlock rescue...
greece, bailout, criticism
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2015-21-25
Saturday, 25 Apr 2015 09:21 AM
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