Saturday

25th Feb 2017

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

News in Brief

  1. Spanish court jails former IMF chief Rato
  2. Macron proposes Nordic-style economic model for France
  3. Germany posts record high budget surplus
  4. Labour ousts Ukip in Brexit homeland
  5. Dutch lower house approves EU-Ukraine treaty
  6. WTO says Russian pork ban was illegal
  7. Belgian nuclear plant made 'significant progress' on safety
  8. Report: Commission gauging EU support for Poland sanctions

Stakeholders' Highlights

  1. EURORDISJoin the Rare Disease Day and Help to Advocate for More Research on Rare Diseases
  2. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  3. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  4. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  5. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  6. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  7. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  8. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  9. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  10. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  11. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  12. Centre Maurits CoppietersMinorities and Migrations

Stakeholders' Highlights

  1. Salzburg Global SeminarThe Child in the City: Health, Parks and Play
  2. UNICEFNumber of Ukrainian Children Needing Aid Nearly Doubles to 1 Million Over the Past Year
  3. Centre Maurits CoppietersThe Situation of Refugee Women in Europe
  4. Salzburg Global SeminarToward a Shared Culture of Health: Charting the Patient-Clinician Relationship
  5. European Free AllianceAustria Should Preserve & Promote Bilingual and Multinational Carinthia
  6. Martens CentreShow Your Love for Democracy! Take Part in Our Contest: "If It's Broken, Let's Fix It"
  7. CISPECloud Computing Leaders Establish Data Protection Standards to Protect Customer Data
  8. Malta EU 2017Landmark Deal Reached With European Parliament on Portability of Online Content
  9. Belgrade Security ForumBSF 2017: Building a Common Future in the Age of Uncertainty
  10. CESIEU Not to Revise the Working Time Directive
  11. International Partnership for Human RightsAzerbaijan: 76 NGOs Urge the EU to Use President's Visit to Insist on Human Rights Reforms
  12. UNICEFDeadliest Winter for Migrant Children Crossing the Central Mediterranean