Thursday

21st Mar 2019

Finance ministers play hardball with Greece

  • Greece's debt problems have raised a question mark over the stability of the eurozone (Photo: Aster-oid)

Euro area finance ministers played hardball with Greece on Monday (15 February), stressing additional austerity measures may be needed rather than detailing bail-out plans as hoped for by Athens.

"We did not want to go public today with the measures we are putting in place," Luxembourgish Prime Minister and eurozone chief Jean-Claude Juncker said after a meeting of euro area finance ministers, in reference to bail-out plans.

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

At an informal summit in Brussels last Thursday, euro area leaders said they would take "determined and co-ordinated action if needed to safeguard financial stability in the euro area as a whole" - diplomatic language indicating Greece would not be left to default on its debt obligations.

But an unwillingness to spell out further details suggests EU members view financial transfers as a matter of last resort, with Germany particularly reluctant to set a new precedent that could see other weak economies seek aid in the future.

Earlier in the day, Greek finance minister George Papaconstantinou called on his EU colleagues to provide greater details of a potential bail-out.

"My guess is that what will stop markets attacking Greece at the moment is a further, more explicit message that makes operational what was decided last Thursday [by EU leaders]," he told a conference in Brussels.

Austerity measures

Instead, the meeting of finance ministers pointed to the possible need for further austerity measures if Greece is to reduce its budget deficit by four percent this year to 8.7 percent of GDP, as outlined last month.

In a detailed "stability programme" report to the European Commission, Athens pledged to slash its deficit from last year's 12.7 percent of GDP to below three percent by 2012, but some analysts question whether the current list of actions will be enough to reach these targets.

The European Central Bank recently made a strong push for additional measures, but finance ministers on Monday opted to wait until a mid-March assessment of Greece's progress before making the call.

Mr Juncker said Greece "should focus on expenditure cuts, for example cutting current capital expenditure," but he also said "revenue-increasing measures" such as tax rises would be necessary.

The EU's new economy commissioner Olli Rehn also stressed further steps were likely to be necessary. "Our view is that risks related to the implementation and macro-economy and markets are materialising, and therefore there is a clear case for additional measures," he said.

Polls show Greece's centre-left Pasok administration still enjoys widespread support having been swept to power in a landslide victory last October, but unions took to the streets earlier this month to protest against government plans for public sector pay cuts, retirement age changes and pension-sector reforms.

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.

Vestager says 'no' to Siemens-Alstom mega-merger

The EU blocked the merger of the makers of Germany's ICE and France's TGV trains, citing concerns of reduced competition and extra costs for consumers and taxpayers. The two countries now want to change the rules.

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. 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

Latest News

  1. EPP suspends Orban's Fidesz party
  2. Macron is confusing rigidity with strength
  3. May tosses Brexit spanner into EU machinery
  4. Centre-right EPP faces showdown with Orban
  5. A compromise proposal for the Article 50 extension
  6. US glyphosate verdict gives ammunition to EU activists
  7. Have a good reason for Brexit extension, Barnier tells UK
  8. EU countries push for new rule of law surveillance

Join EUobserver

Support quality EU news

Join us