Wednesday

6th Jul 2022

Dombrovskis to Greece: 'No time to lose'

  • Greece must 'work hard', Dombrovskis (l) told finance minister Tsakalotos (c) and economy minister Stathakis (r) (Photo: European commission)

European Commission vice-president for the euro, Valdis Dombrovskis, on a visit to Athens on Monday (26 October), warned the Greek government that "there is no time to lose" in implementing the measures asked for by creditors.

"We need to work very intensively to ensure that there is no additional delay" on the first review of the bailout plan, he said.

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"The intention is still to complete the review in the next month but that would require intensive work".

For its part, Germany's Sueddeutsche Zeitung wrote on Tuesday that Greece's creditors are ready to delay disbursement of a €2 billion bailout tranche because of lack of progress on reforms.

The newspaper said that last week's mission of EU "troika" experts in Athens brought no progress and that the payment, due in October, will take place no earlier than November.

Willingness to work

Dombrovskis met with the Greek ministers of finance, economy, and labour and social security, as well as with prime minister Alexis Tsipras.

The EU commissioner said discussions were "good and constructive" and that the Greek government showed "willingness to work hard".

But he added that "it's up to the Greek authorities to set up the legislative and administrative framework to use the European funds" made available through the latest rescue package .

The talks dealt with the absorption by Greece of EU funds, reform of the labour market with the help of the World Labour Organisation, and the creation of minimum guaranteed income.

The migration crisis was also discussed, with the Commission announcing €5.9 million of related, new aid for Greece.

An agreement for a technical assistance programme to help Greece implement reforms was also reached on Monday.

Repossessions and pensions

Discussions were more difficult on the issues of pension reform and repossession of homes.

Greece's creditors - the European Commission, the European Central Bank, the European Stability Mechanism, and the International Monetary Fund - have asked Greece to lower the level at which owners' primary residence is protected from repossession when the owner is not repaying his loan.

While the Greek government wants to protect homes up to €300,000 for owners earning up to €35,000 a year, creditors demand the level is lowered to homes worth up to €120,000. That would affect 80 percent of borrowers instead of 75 percent.

The issue is at the center of efforts to solve the problem of non-performing loans in the perspective of bank recapitalisations and lifting of capital controls on Greece's banking system.

Another sticking point is pension reforms.

Creditors demand a pension system that "provides adequate social protection but is also financially viable in medium to longer term," Dombrovskis said in Athens.

"We are talking about a systemic pension reform," he added, noting that the issue will be part of the first bailout review.

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