Saturday

21st Oct 2017

Greece in limbo after EU conference call

  • Greek parliament. Prime Minister Papandreou is reportedly considering holding a referendum on membership in the single currency (Photo: Gerard McGovern)

While negotiations between the Greek government and international lenders remain inconclusive, a report out of Athens suggests that the prime minister is looking to hold a referendum on staying in the euro.

A conference call on Monday night (19 September) between the Greek finance minister and senior representatives of the troika - the European Commission, the European Central Bank and the International Monetary Fund - in which the international lenders pressed Athens once again to speed up its public sector cuts ended with no outcome, leaving the eurozone to wake up once again on Tuesday to a limbo of uncertainty.

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Evangelos Venizelos, the Greek finance minister, and the deputy prime minister took part in the conference call, which centred around the next steps the government must take in order to win delivery of the next tranche of bail-out cash, some €8 billion. Without these funds, the country is expected to run out of money by mid-October.

The finance ministry put out a statement following the phone call saying that the discussion was "productive and substantive" and that on Tuesday morning, technical experts in Athens will "further elaborate on some data."

A second conference call is to take place on Tuesday evening.

Greek media reports that the troika representatives are demanding a series of 15 new measures to be immediately implemented. The moves include cuts in civil servant pay, closure of some 30 unprofitable public enterprises, lower healthcare spending, limits on pensions, 20,000 civil servant lay-offs and corralling some 150,000 state workers into a "labour reserve" in which they will receive lower wages before being fired.

If the government does not accept the conditions, it will not receive the bail-out cash.

For its part, the European Commission on Monday said it is not asking Greece to accept any fresh austerity, but merely to adhere to what has already been agreed.

Meanwhile, the Greek government is on a knife edge as civil unrest threatens to once again sweep across the country. And ministers admit that popular resistance to austerity has been successful in helping to throw sand in the wheels of restructuring.

On Monday, public sector workers agreed to hold a national strike on 6 October. Discussions are underway to extend the work-stoppage to a general strike in all sectors.

Prime Minister George Papandreou is considering holding a referendum on whether to continue with austerity or to exit the euro, according to a report in conservative Greek daily Kathimerini.

According to the paper, Papandreou believes that a successful vote would give the government a fresh mandate to push through what the troika demands.

A loss in the referendum however would likely result in snap elections at an awkward time. But some cabinet ministers believe the government should move directly to elections in any case.

Legislation putting forward the referendum question is to be discussed in the next few days.

In separate developments, agency Standard & Poor’s on Monday cut Italy’s sovereign debt rating from A to A+ and kept its outlook on negative. It justified the move by saying the country’s growth prospects are gloomy and that the latest austerity measures announced by the government are unlikely to improve matters.

"We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve," the agency said.

Merkel, Sarkozy: ‘Future of Greece is in euro’

German Chancellor Angela Merkel and French President Nicolas Sarkozy attempted to calm market anxiety over a possible Greek default on Wednesday evening, affirming their commitment to Greek membership of the euro.

Austerity cuts not to blame for Greek drug shortage, EU says

The European Commission has said its austerity measures are not to blame for a decision by pharmaceutical giant Roche to halt delivery of cancer drugs to Greek public hospitals. The company warned Italy, Portugal and Spain might be next.

EU task force for Greece ‘here to help, not control’

The head of an EU task force for Greece said on Thursday that the aim of the newly established body is to support the country as it attempts to slash its public debts. The team arrived in Athens as fresh figures put unemployment in the country at a record 16.3 percent, with 32.9 percent of young people out of work.

Troika to return to Athens next week

Troika inspectors are to return to Athens “early next week”, the European Commission and the Greek government announced on Tuesday night following something of a breakthrough in discussions between the two sides, but there is still no deal on the dispersal of the latest round of bail-out cash to the heavily indebted country.

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