Monday

27th May 2019

Eurozone chiefs: Greece can wait till November

  • Jean-Claude Juncker: 'Everything will be done to avoid Greek default' (Photo: Council of European Union)

Eurozone finance ministers have kicked down a decision on the delivery of Greece’s latest tranche of bail-out cash, saying that the country can wait until November.

At the end of a seven-hour meeting in Luxembourg that bled into early Tuesday (4 October), the economy chiefs stressed that they will not let Greece default, but that the country must work further on its structural adjustment and privatisations.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"We had no one advocating a default for Greece. Everything will be done to avoid that and it will be avoided," Jean-Claude Juncker, the chair of the eurogroup of states, said after the meeting.

The countries that employ the single currency will make a decision on handing over €8 billion in eurozone and IMF cash some time in October, he said, while the Belgian finance minister said that Athens has until mid-November before it runs out of cash.

"Greece told us that the funds will have to be made available during the second week of November. We reviewed the Greek plan and we will now wait for the final report from the troika since we have time to decide," Belgian finance minister Didier Reynders told reporters.

Until now, Greece has maintained that it would begin to be unable to pay its bills around the middle of October.

Juncker also hinted that private sector investors may have to up their expected haircut on the Greek debt they hold, in line with the demands of Germany but opposed by France out of fears for its banks, which are highly exposed to debt from the Hellenic Republic.

In July, eurozone leaders backed 21 percent write-downs on Greek bonds as part of a plan cobbled together by the International Institute for Finance, the global association of financial institutions. Berlin however has come round to the notion that Greece is simply unable to pay off the scale of its debts and that a more substantial haircut is necessary to prevent a disorderly default.

The ministers for the first time also moved into discussions over a possible massive expansion of the firepower of the European Financial Stability Fund. It is understood that options on the table include leveraging the rescue fund via the European Central Bank in a way that would not require endorsement by the parliaments of all 17 eurozone member states, an arduous process not in keeping with the schedule demanded by markets for crisis response.

"We need a more flexible and powerful EFSF as a financial firewall to contain contagion,” said Rehn, although none of the economy officials at the meeting would offer any further details than what is already the subject of speculation in the media.

However, in one major breakthrough, the eurozone chiefs finally managed to resolve the issue of Finland’s demand for collateral from Greece in return for its participation in the bail-out.

The ministers found a solution that still allows the country its collateral, but makes the terms so onerous that it is highly unlikely any other eurozone state will go down the same path.

Finland must make a payment of €1.4 billion to the permanent eurozone rescue fund to be set up in 2013, the European Stability Mechanism, while other states only need to deliver their sums over the course of five years. Helsinki will also receive a lower interest rate on its loans compared to the other states.

Greece will not meet deficit targets this year or in 2012

The Greek finance ministry on Sunday conceded that the government will not be able to meet the deficit reduction targets imposed by the European Union and the International Monetary Fund for this year or next.

Finland on Greek collateral: 'It's not about the money'

Finnish minister Alexander Stubb has said his country's demand for Greek collateral is meant to defend the eurozone principle of financial responsibility. But he admitted that Finnish eurosceptics have played their part in the initiative.

Ordinary Greeks turning to NGOs as health system hit by austerity

As impoverished Greek citizens lose access to healthcare, they have started to turn to temporary clinics set up by the likes of Medecins Sans Frontieres and Medecins du Monde - clinics that had been intended to come to the aid of migrants and refugees.

Greek healthcare eroded by austerity measures, crisis

The Lancet, the world's leading medical journal, has blamed austerity measures and the economic crisis for startling declines in the health of Greek citizens and increases in the rates of drug abuse, HIV infection and suicide.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

News in Brief

  1. Timmermans calls for 'progressive alliance'
  2. Catalonia's Puigdemont wins MEP seat
  3. Weber opens door to alliance with greens and liberals
  4. Tsipras calls snap Greek election after EP defeat
  5. Polish ruling PiS takes lion's share of EU vote
  6. Romanian voters punish ruling PSD party
  7. First official EP projection: EPP remain top, Greens fourth
  8. UK forecast puts Brexit Party on top, with 24 seats

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. Populists' EU breakthrough fails, greens and liberals gain
  2. Jubilant Greens in party mood after first EP projection
  3. 2019 European election results
  4. Thunberg: We can still fix climate, but must start today
  5. Turnout up in Slovakia, with pro-EU liberals scoring high
  6. Belgium votes in hybrid EU-national election
  7. Irish greens take Dublin in second EU exit poll
  8. EU election results to trigger top jobs scramble This WEEK

Join EUobserver

Support quality EU news

Join us