Sunday

17th Dec 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.

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.

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.

Facebook to shift ad revenue away from Ireland

Public pressure about low corporate taxes appear to have pressured Facebook to launch plans to stop routing international ad sales through its Dublin-based headquarters in Ireland.

News in Brief

  1. EU adopts 'track-and-trace' tobacco system
  2. Luxembourg appeals Amazon tax decision
  3. EU leaders agree to open phase 2 of Brexit talks
  4. Juncker: May made 'big efforts' on Brexit
  5. Merkel took 'tough' line on Russia at EU summit
  6. EU leaders added line supporting 'two-state' solution
  7. EU leaders agree to 20 European Universities by 2024
  8. Belgian courts end legal proceedings against Puigdemont

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Catalonia, Brexit, and Uber on EU agenda This WEEK
  2. Macron and Merkel take tough line on Poland
  3. Eurozone future needs structural reforms, EU leaders told
  4. Showdown EU vote on asylum looking likely for next June
  5. EU stresses unity as it launches next phase of Brexit talks
  6. Polish PM ready for EU sanctions scrap
  7. Dutchman to lead powerful euro working group
  8. EU mulls post-Brexit balance of euro and non-eurozone states

Stakeholders' Highlights

  1. EPSUEU Blacklist of Tax Havens Is a Sham
  2. EU2017EERole of Culture in Building Cohesive Societies in Europe
  3. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  4. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  5. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  6. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  7. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  8. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  9. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  10. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  11. Dialogue PlatformThe Turkey I No Longer Know
  12. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives