Tuesday

24th May 2022

Greece situation 'dramatic'

  • 'We are carrying our people's dignity as well as the aspirations of all Europeans' Tsipras (Photo: danoots)

European Central Bank chief Mario Draghi said on Monday (15 June) that "the economic situation in Greece is dramatic" but promised to help secure a bailout deal.

Draghi, who was speaking at a hearing in the European Parliament, said "urgent action is necessary".

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“While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps”.

His remarks came as the Greek government and its creditors are locked in a standoff, blaming each other for the collapse of negotiations on Sunday.

Commission officials, on Monday, gave journalists a detailed account of the weekend’s failed talks, stressing the fact that the Greek delegation did not produce any concrete new proposal to reach a deal to unblock a last €7.2 billion tranche of the current bailout.

On Saturday and Sunday, said one official, experts from the ECB, the International Monetary Fund (IMF) and the European Stability Mechanism (ESM) were in the commission building, ready to negotiate with the Greeks, but that there was nothing to talk about.

"We are ready at any point to reconvene at very short notice," the official said, adding that “the negotiation will go on as soon as there is a serious proposal from the Greek authorities".

In Athens, Greek prime minister Alexis Tsipras gave a different account.

He said in a statement that "the Greek government has been negotiating with a specific plan and documented proposals" and that he would now "wait patiently until the institutions adhere to realism".

Tsipras warned that Greece's "sincere wish for a solution as well as efforts to bridge the gap" shouldn’t be seen "as a sign of weakness".

“We are not only carrying a historical past underlined with struggles," he added.

"We are carrying our people's dignity as well as the aspirations of all Europeans. We cannot ignore this responsibility. It is not a matter of ideological stubbornness. It has to do with democracy".

In an unusual move in what now amounts to a communications war between Athens and its lenders, the commission's economic policy spokeswoman, Annika Breidthardt, detailed at a press conference the proposal presented last week by the EU, the ECB and the IMF to the Greek government.

The proposal is "substantial, balanced and it makes full economic sense," she said, adding that the other 18 eurozone countries were "also democratically accountable" for an agreement.

On the highly symbolic issue of pensions, Breidthardt denied that that creditors are seeking cuts on the smallest pensions.

She pointed out that pensions are the most expensive part of Greece's spending and that Greece has the most expensive pension regime in Europe.

She said that while creditors asked for savings representing 1 percent of GDP each year, the Greek government proposed measure representing only 0.004 percent of GDP.

"We're looking at a comprehensive agreement that includes measures on a lot of issues," another EU official said, adding that “if revenus coming out of VAT reform are enough, we will be happy to ask less on pensions".

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