EU to tell Greece time, patience running out

By Reuters

Mar 19, 2015 07:31 AM EDT

Euro zone leaders will tell Greece on Thursday that time and patience are running out for its leftist-led government to implement agreed reforms to avert a looming cash crunch that could force it out of the single currency.

Prime Minister Alexis Tsipras has requested a meeting with the leaders of Germany, France and the main EU institutions on the sidelines of a European Union summit to press for Athens to be allowed to raise short-term funds to keep itself afloat.

"I will repeat to him what I've already told him twice: Greece must undertake the necessary reforms, Greece must ensure that the commitments it made to the Eurogroup in 2012 and more recently are followed up on," European Commission President Jean-Claude Juncker told France's Europe 1 radio.

German Chancellor Angela Merkel delivered the same message in a speech to parliament ahead of the Brussels talks and a crucial visit by Tsipras to Berlin next Monday, saying the crisis would only be overcome if Greece stuck to agreements.

No one should expect a solution at Thursday's late-night Brussels talks or from her meeting with Tsipras next week, at which she said they would have "time to talk to each other in detail and perhaps also to argue".

A political meeting of a small group of leaders could not and would not replace the formal agreement Greece concluded on Feb. 20 with Eurogroup finance ministers.

"There remains a very tough way ahead," Merkel said. Greece must understand that international aid brought with it an obligation "to reform its budget and work towards one day no longer needing help".

Juncker has been trying to build bridges between Tsipras and Greece's creditors. His tone of exasperation suggested even Athens' friends are angry at his government's mixture of belligerent rhetoric and procrastination.

Greece has been kept from bankruptcy since 2010 by two EU/International Monetary Fund bailouts totaling 240 billion euros but its economy has shrunk by 25 percent, partly due to austerity measures imposed by the lenders. It now risks running out of cash within weeks if it does not receive more aid.

EU sources said Greece had refused to provide any update on public finances or reform plans in a conference call of senior euro zone officials on Tuesday and had denied EU, IMF and European Central Bank experts access to government buildings in Athens, insisting all meetings take place in a hotel.


Deputy Prime Minister Yannis Dragasakis acknowledged on late-night television that Greece faced a liquidity problem and needed the cooperation of its European lenders to keep paying salaries, pensions and debt repayments.

"We haven't received any (bailout) tranches since August 2014 but we have been meeting all of our obligations," he told Alpha TV. "This has its limits.

"Of course we have a liquidity problem, for the reason I mentioned. We have obligations which, in order for us to meet, we need the good cooperation of the European institutions."

European Parliament President Martin Schulz said Greece's financial situation was "dangerous" and it needed two to three billion euros in the short term to avoid bankruptcy.

"Time is short," Schulz told Deutschlandfunk radio. "So it would be good if Greece fulfils the obligations that it has agreed to - then further money will flow."

Tsipras' Syriza party won a general election in January on a platform of scrapping the bailouts, ending austerity and refusing to cooperate with the "troika" of institutions supervising its bailout program.

The prime minister lambasted EU "technocrats" on Wednesday for demanding prior consultations on the cost of a "humanitarian bill" adopted by parliament to provide food stamps and free electricity to the poorest Greeks worst hit by austerity.

Athens has made no move in the month since the Brussels agreement to bring forward legislation to meet its commitments under the bailout agreement.

The chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem of the Netherlands, hinted this week that Greece might have to introduce capital controls restricting cash withdrawals, as Cyprus had done, if financial stress got worse.

German Finance Minister Wolfgang Schaeuble has warned that the risk of an accidental Greek exit from the euro zone is rising, while insisting that Berlin wants to avoid that.

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics