Wednesday

23rd May 2018

EU: No flexibility until Greek government in place

  • The Greek bail-out drama goes on (Photo: wikipedia)

German and EU officials said on Monday (18 June) that there can be no softer deadlines on the Greek bail-out programme until a new government is in place.

Meanwhile, the Greek election outcome has done little to alleviate Spain's woes - the eurozone's bigger worry.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The narrow victory of the pro-bail-out New Democracy party in Greece and the likelihood it can form a coalition government with its former Social-Democrat (Pasok) rival is "good news for the euro, for the eurozone and for Europe," German government spokesman Georg Streiter said on Monday in Berlin.

He backtracked on statements made on Sunday by German foreign minister Guido Westerwelle, who said that some extension of deadlines in the Greek programme could be envisaged.

"It's decisive now for the troika to be convinced that Greece will stick to its agreements and fully implement the agreed reforms. Now is not the time for any kind of discounts to Greece," Streiter said.

Westerwelle, who comes from a different party than Merkel, spoke again on Monday on German public radio, saying that his earlier remarks referred only to the "time lost" through election campaigning.

"We are willing to talk about the time frame, since you can't ignore the weeks that have been lost, and we also don't want the people to suffer who now have a very harsh life through many reforms being neglected in the past," he said.

But the finance ministry - a domain of Merkel's party - said through a spokeswoman that an upcoming €31.3 billion bail-out payment would only be disbursed when a stable government is in place and when the "troika" of international lenders finds that the reforms are on track.

EU officials privately acknowledge that even though the Greek programme may see some flexibility on one or two measures, the very precondition for any negotiation with the troika is for a government with strong parliamentary support to be in place in Athens.

EU commission chief Jose Manuel Barroso and EU Council chairman, Herman Van Rompuy on Sunday night also said in a joint statement that: "We are hopeful that the election results will allow a government to be formed quickly."

The message seems to have reached New Democracy leader Antonis Samaras, who on Monday kicked off coalition talks, saying it is "imperative" to form a coalition by the end of the day.

The Conservative leader, who last year dragged his heels on talks on the second bail-out and only reluctantly signed up to the attached reform programme, also said there should be amendments to the conditions of the EU-IMF bail-out deal "so the Greek people can escape from today's torturous reality."

A frail government under constant pressure from a strong anti-bail-out opposition led by 37-year old Alexis Tsipras, whose Syriza party came second in the elections, is likely to emerge from the talks, continuing the uncertainty about Greece's future in the eurozone, Fitch ratings agency warned on Monday.

While the immediate risk of a Greek exit has been averted, the agency said that "the crisis in Greece and the eurozone remains intense."

With worsening recession, tough budget cuts and massive outflows of capital from Greece, Fitch estimates that further funds may be needed for the struggling country.

It also called on EU leaders to come up with a "credible road map that would complete monetary union with much greater fiscal and financial integration" so as to alleviate market pressure on other euro-countries, a reference to Spain, where borrowing costs remained above seven percent on Monday - a threshold considered to be bail-out territory.

International spotlight on Greek elections

Europe is in wait-and-see mode as Greeks head to the ballot boxes for a vote that is set to determine the future of their country in the eurozone.

EU pessimistic on permanent US trade exemption

EU trade chief said the US will impose tariffs or "other limiting measures" on 1 June, as the EU's offer to start limited trade talks is probably not enough for the protectionist Trump presidency.

Commission 'playing tricks' with EU budget figures

The EU parliament's budget rapporteur complained the Commission is using numbers with a "desire to confuse". According to parliament estimates, the cohesion fund could suffer as much as a 45 percent cut.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Opinion

EU budget must not fortify Europe at expense of peace

Given the European Commission new budget's heavy focus on migration, border management and security, many are asking whether the proposal will fortify Europe at the expense of its peace commitments.

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. 'Killer robot' projects eligible for EU defence fund
  2. Funding for European values needs radical changes
  3. Feeble EU format deflates Zuckerberg 'hearing'
  4. Are EU data watchdogs staffed for GDPR?
  5. EU pessimistic on permanent US trade exemption
  6. US asks EU to go after Russian and African villains
  7. Facebook threatened with removal from EU-US data pact
  8. Defence firms 'reap benefits' of advice to EU

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight