19th Sep 2019

EU offers €2bn in unspent aid to Greece

  • Greek PM Alexis Tsipras is under pressure to present a concrete list of reform in order to free up bailout money (Photo: The Council of the European Union)

The EU is to send Greece €2bn this year to be used to combat the country's social crisis, while a mini-meeting to discuss the country's problems is being hailed as having cleared the air after a fractious few weeks.

EU commission president Jean-Claude Juncker Friday (20 March) said Greece has a "humanitarian crisis" and that he has asked euro commissioner Valdis Dombrovskis to look into how the money - unused development funds - can be better "absorbed" by the country.

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Speaking after an EU summit in Brussels, he said the money was "not intended for the coffers of the Greek state" but to establish "social cohesion", focussing on young unemployed people and "encouraging" small businesses.

"This money is available. And it is not being used actually, which is a problem. And difficult to justify to Greeks and Europeans," said Juncker, noting that the country will have a co-financing rate of five percent, rather than the normal 15-percent rate.

Greek leader Alexis Tsipras, who came to the summit following days of sniping between Athens and its eurozone partners, said the €2bn represented a "good outcome" and that a mini-meeting along with the French and German leaders meant he was leaving Brussels in a more "optimistic" mood.

His interpretation of the meeting was backed up by EU council president Donald Tusk, who late Thursday evening gathered the three leaders plus the presidents of the European Commission, European Central Bank and Eurogroup around one table to try and calm tensions.

"I am quite satisfied," said Tusk, noting the meeting had served as a "reality check" for everyone.

It was a reality check for the "Greek prime minister when it comes to his expectations of immediate help. And also for the side of the [EU] institutions, like President Juncker and myself. We understand much better how critical the political situation is in Greece".

"Trust is the foundation in this very complex process of negotiations," he said.

Tusk predicted that on-the-ground work in Athens "will be much easier because we are more realistic".

After the mini meeting, Tusk's office released a short statement saying that policy talks will take place in Brussels and a "fact-finding mission" will take place in Athens. The careful language caters to the Greek government's sensitivities about having control over the situation.

Athens has been under pressure to provide a concrete list of reforms the country will undertake in return for the next tranche of bailout money.

Tsipras, who was elected January on an end-to-austerity ticket, has been struggling to reconcile the demands of his far-left backbenchers and an expectant Greek population, with the demands of his eurozone colleagues.

Recent days have seen an escalation in the war of words particularly between Athens and Berlin.

Part of the summit's negotiation means that it has been spelt out that Greece can choose what reforms it will make.

"The Greek authorities will have the ownership of the reforms which means that the Greek government has the opportunity to pick individual reforms that are still outstanding as of 10th December and replace them by other reforms," said German chancellor Angela Merkel.

"All of it has to add up financially speaking," she added.

She said she does not expect the reforms list, which is meant to be drawn up by Athens "in the next days", to be given to her on Monday when she meets Tsipras for bilateral talks in Berlin, but rather to the "institutions" - with Germany keen to avoid the perception that it is calling the shots in the eurozone.

Meanwhile, amid reports that savers over past weeks have been removing billions of euros from Greek bank accounts, Tsipras appealed to Greeks to trust their government.

"We ask the Greek people to keep cool," he said.


Still waiting for Greece, this WEEK

The long wait for the list of Greek reforms is due to end on Monday, but its government has missed deadlines before.


The euro-crisis and the Greek crisis

It was the Greeks who chose the politicians that led the country into disaster. But is it really as simple as that?

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