Sunday

21st Jul 2019

Troika in Greece amid renewed euro-exit talk

  • Greek PM Samaras is under pressure to deliver on promised spending cuts (Photo: European People's Party)

Officials from the troika of international lenders are back in Athens on Tuesday (24 July as the three-party government struggles to meet the spending cuts demanded in return for the bailout money.

The Greek government is several months behind on promised spending cuts and privatisations. The auditors from the EU commission, European Central Bank and International Monetary Fund are set to draw up a report on how big the shortfall is and whether Greece can still receive the next tranche of €31.5 billion in September.

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

Without this money, the Greek authorities will not be able to repay outstanding debt to the eurozone central bank, or salaries and pensions in the coming months.

Development minister Costis Hatzidakis on Sunday warned that the two months ahead are "the most critical" and that his country is in a "state of emergency."

"If the current government fails, the next one will be a government of the drachma," Hatzidakis told Ethnos daily.

The government, led by Conservative leader Antonis Samaras, took two elections and at least three months of stalled reforms to come together.

The troika further postponed its mission as Samaras was rushed into a hospital to undergo eye surgery and his first pick for a finance minister refused to take up the job amid health problems.

The current finance minister, Yannis Stournaras, an Oxford-educated economist, has so far come up with only about €8 billion in spending cuts out of the €11.5 billion which should have been identified in June. Initially, the Samaras government had hoped to negotiate an extension of at least two more years in meeting the bailout requirements, as the economy is shrinking faster than forecast.

State income is over €1.5 billion short of the predicted revenues in the first half of this year, the finance ministry said last week. And privatisations of state assets, which should have brought in €3 billion this year, are only expected to reach a tenth of that target, according to the head of the privatisation fund, Costas Mitropoulos, who resigned last week, citing lack of support from Samaras.

"Right now we need to secure an at least tolerable troika report by the end of August," finance minister Stournaras told financial daily Imerisia on Saturday.

He admitted that a deadline extension, as first envisaged by the Samaras government, "cannot be taken for granted."

"Everything is under negotiation and unfortunately, much of what was agreed is not in an implementation phase," the minister said.

Three German ministers over the weekend warned that there is no way around more spending cuts and sticking to the bailout terms, with finance minister Wolfgang Schauble warning that Greece must "make up for any delays."

Schauble told Bild newspaper there were no similarities between Greece and Spain, who recently obtained longer deadlines in meeting its deficit targets.

Economy minister Philipp Roesler meanwhile did not hesitate in floating the Greek euro-exit scenario again.

“What’s emerging is that Greece will probably not be able to fullfil its conditions. If Greece doesn’t fulfill those conditions, then there can be no more payments,” he told ARD broadcaster on Sunday.

He said that an end of the bailout would lead Greeks to conclude "that it is perhaps smarter to leave the eurozone".

"I think for many experts, for the FDP, for me, that an exit by Greece from the eurozone lost its horror a long time ago."

German foreign minister Guido Westerwelle also said in an interview with Hamburger Abendblatt that his liberal party - the junior coalition member to which Roesler also belongs - will never agree to Greek attempts to water down the bailout terms.

“That won’t work, that’s a Rubicon we can’t cross,” Westerwelle told the newspaper, even though last month he said Athens could hope for better terms as its economy was worsening.

But the feeling that Greek politicians are simply not sticking to what they promise has worn down any sense of patience among German politicians.

In addition, Der Spiegel on Monday reported that the IMF is considering withdrawing from any extra payments to Greece.

If Greece manages to secure extra time for its reform programme, the German magazine said, this would likely boost the total bill by a further €10-50 billion in bailout money.

If the IMF pulls out, other eurozone countries are also likely to stop paying. Finland and the Netherlands have linked their contributions to IMF participation.

Greek orthodox head defends Church over tax scandals

Taxes in Greece continue to slip through state scrutiny as some corporations, wealthy Greek-ship owning families, and the Greek Orthodox Church are either exempt or use loopholes to hide millions of euros.

Eurozone crisis worsens as Germany warned on top rating

The euro-crisis is accelerating as Spanish borrowing costs continue rising and Germany, the Netherlands and Luxembourg on Monday were warned they may lose their triple A rating due to "rising uncertainty."

Words are not enough, Barroso tells Greece

Greece must stop delaying reforms, EU commission president Barroso said in Athens while Greek PM Samaras called on EU politicians to refrain from negative comments, with sceptical statements emerging almost daily from Germany.

Greece running out of cash as talks continue

Coalition partners in Greece have so far failed to agree the details spending cuts required by international lenders to unblock more aid, just as a minister warned cash reserves are drying up.

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. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Abortion Wars
  2. EU goes on holiday as new UK PM arrives This WEEK
  3. Survey: Half of EU staff 'don't know' ethics rules
  4. Von der Leyen signals soft touch on migrants, rule of law
  5. Timmermans: von der Leyen will be tough on rule of law
  6. Timmermans trolls 'idiot' Brexit negotiators
  7. Rudderless Europe: Will real Germany please stand up?
  8. PiS & Fidesz claim credit for von der Leyen victory

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us