Friday

22nd Jun 2018

Eurozone gives Greece 10-day ultimatum

  • Merkel and Samaris met in Berlin in August (Photo: primeminister.gov.gr)

Eurozone finance ministers have given Greece 10 days to implement budget cuts in return for a delayed bailout tranche.

"We stressed that before the next disbursement Greece clearly and credibly should demonstrate its commitment to fully implement the programme ... by the 18 October at the latest," said Jean-Claude Juncker, chair of the eurozone finance ministers, on Monday (8 October).

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He noted that most of the 89 "prior actions" - a list of budget cuts, privatisations, labour market and tax reforms agreed in March - had been agreed upon within the three-party coalition in Athens, but that no money could flow before everything is implemented.

The €31.5 billion tranche of bailout money has been delayed since June, awaiting a report by experts from the "troika" of international lenders - the EUuropean Commission, European Central Bank and International Monetary Fund (IMF) - who are still in Athens trying to figure out how to plug the widening gap in Greek finances.

IMF chief Christine Lagarde, during the same press conference, also said that "more work needs to be done" and that "acting means acting, not just speaking."

She denied reports that the IMF was at odds with the EU over Greece's debt sustainability scenario, a projection underlying the €130 billion bailout agreed in March, which assumes that debt-to-GDP will fall to 120 percent by 2020.

"There are no figures yet, the troika has not finalised its report," Lagarde said.

In a separate report issued Monday, the IMF warned of a possible worsening of the euro-crisis amid "rising social tensions and adjustment fatigue" in the "periphery" - meaning countries such as Greece, Portugal and Spain where anti-austerity protests have intensified in recent weeks.

About 8,000 protesters took to the streets of Athens on Monday on the eve of a visit by German Chancellor Angela Merkel shouting "Merkel raus [out]" and "Angela, go home."

Some 7,000 policemen are to be deployed during her six-hour visit to the Greek capital, with large parts of the city closed to protesters.

Merkel is on her first visit since Greece went bankrupt in 2009 and had to ask for two consecutive bailouts. Her visit is designed to show support for centre-right Prime Minister Antonis Samaras as he struggles to implement further austerity measures.

Blamed for most of Greece's woes in Greek press, Merkel has softened her stance in recent months.

But her message is likely to be more of the same: no money until the troika says the austerity measures are being implemented properly.

Agenda

Merkel to visit Greece this WEEK

German Chancellor Merkel will Greek PM Samaras in her first visit to the debt-ridden country since the crisis began.

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The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

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Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

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