23rd Oct 2016

Eurozone ministers postpone Greek deal

  • Further spending cuts and written pledges are still needed, says Juncker (Photo: Luxembourg EU Presidency)

Eurozone countries have again postponed the new Greek bail-out despite the country's looming bankruptcy, with a meeting of finance ministers on Wednesday (15 February) downgraded to a conference call, pending more spending cuts by Athens and written pledges from Greek politicians.

Despite the Greek parliament having approved a €3.2 billion austerity plan on Sunday, "further technical needed in a number of areas, including the closure of the fiscal gap of €325 million euro in 2012," Jean-Claude Juncker, who chairs the eurogroup meetings of finance ministers, said in an emailed statement on Tuesday evening.

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Coalition leaders in Athens also need to send Juncker the "required political assurances" that they will not undo the reform programme after general elections due in April.

"Against this background, I have decided to convene ministers to a conference call tomorrow in order to discuss the outstanding issues and prepare the ordinary meeting of the Eurogroup on Monday, 20 February 2012," Juncker explained.

The fresh setback puts Athens in real jeopardy of not being able to repay €14.5 billion worth of bond yields on 20 March.

"This is not our problem," one EU diplomat told this website on Tuesday, reflecting a growing hostility in Brussels toward the Greek government and its track record of delays and broken promises.

"Until we have it all definitively on paper, with really solid guarantees from Greece as well, and legislation, we can’t make any decisions," Dutch finance minister Jan Kees de Jager told Dutch TV.

Back in Athens, where the parliament defied public anger in passing more austerity cuts over the weekend, public order minister Christos Papoutsis said the government has made "superhuman" efforts to comply with the demands of eurozone countries.

"Greece has made all the efforts that it needed to do, and the people cannot take any more ... From now on, Europe has to take the responsibility," he told press after a cabinet meeting on Tuesday.

An official report published earlier the same day showed that the Greek economy shrunk faster than expected in the last three months of 2011, when it contracted by seven percent from five percent in the previous quarter.

Meanwhile, a coalition of human rights associations on has warned that the new set of austerity measures imposed on Greece will create a "dramatic and suicidal situation."

"This mad race of increasing austerity can only worsen the existing strong economic and social recession in a context of already extremely degraded living conditions of the Greeks," the European Association for the Defence of Human Rights said in a statement.

For his part, EU economic affairs commissioner Olli Rehn on Tuesday said he "can understand the pain and turmoil in Greece. " But he insisted that the austerity plan is the lesser evil compared to an outright default, which would have a "devastating impact on the Greek society" and the wider eurozone through its contagion effect.

"Unfortunately Greece lived systematically beyond its means in the past 10 years - that's why corrective action is needed so that the Greek economy is restored to a sustainable path," he said.

Belgian unions show solidarity with the Greek people.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

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