Tuesday

20th Nov 2018

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.

News in Brief

  1. Hungary grants asylum to ex-Macedonia PM
  2. UK court rules against government in Article 50 case
  3. May to meet Juncker on Wednesday to finalise Brexit deal
  4. Future of EU's Mediterranean naval mission in doubt
  5. EU budget talks for 2019 collapse
  6. EU mulls new Russia sanctions over Ukraine 'elections'
  7. EU farm chief 'confident' sugar prices will recover
  8. Researcher: EU expert groups still imbalanced and opaque

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Boycott threats mount on eve of Interpol election
  2. EU parliament to renege on transparency promises
  3. Cyprus and Greece to create EU spy academy
  4. MEPs likely to delay vote on greater transparency
  5. Cold shoulder for Franco-German euro budget plan
  6. Whistleblower: Danske Bank gag stops me telling more
  7. Spain raises Gibraltar, as EU and UK talk post-2020 relationship
  8. Panic is not answer to EU's security challenges

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Mission of China to the EUChina: Work Together for a Better Globalisation
  8. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  9. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  10. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  11. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  12. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future

Join EUobserver

Support quality EU news

Join us