Eurogroup talks stall as Greece dithers on its promises

24.04.2015. Informal Meeting of Ministers for Economic and Financial Affairs (ECOFIN) / Eurogroup doorsteps EUROGROUP, Mr Jeroen Dijsselbloem, President of the Eurogroup/ Minister of Finance of the Netherlands

At the Eurogroup meeting on Friday, 24 April, all eyes were on Greece. The embattled Eurozone country got hammered for backtracking on much needed fiscal reforms. Eurogroup officials stated that such measures are vital in helping the Greek government secure its debt repayments. Without the remaining €7.2 billion in the bailout package, Greece will run out of money in a matter of weeks. The stark warning came as Mr. Varoufakis, Greece’s Finance Minister, tried to calm fears over his country’s ability to raise nearly € 1 billion by next month to repay its creditors.

Greece’s political scene isn’t by any means less disruptive, with a government caught between defending its generous electoral promises and the austerity EU demands. Early this year, the left-wing Syriza Party swept to power in a stunning victory. The party won its votes by running on a mandate to cease the austerity measures set in place by the so-called “Troika” – a group of supervising bodies representing the European Commission, the European Central Bank and the International Monetary Fund. Three months on, the ruling Greek party finds itself between a rock and a hard place. With little room for maneuver, Prime Minister Alexis Tsipras and his team face a hard choice: stick to the campaign promises and risk Greece default on its debt, or continue reining in public spending, raise tax revenue and keep in place the economic reforms aimed at restoring fiscal credibility.

It seems that the Greek government has yet to decide which card it wants to play. This hesitance turned into the object of contempt during Friday’s Eurogroup meeting. Reports say that Greece’s dithering brought about the ire of the Eurogroup President, Mr. Dijsselbloem, who expressed frustration over the slow pace of negotiations. According to Bloomberg, he went on to say that the Greek Finance Minister is a “time-waster, a gambler and an amateur”, and his handling of the talks was irresponsible. This opinion was shared by others, such as the Slovenian Finance Minister, who bluntly called for a “Plan B should the bailout talks not progress more quickly” and Greece is to default on its debt.

Calls for Greece to get off the dime were heard from other finance ministers as the tense discussion progressed towards no formal agreement. The unresolved nature of the talks made it into the official press release which stated that the responsibility for money to be quickly disbursed “lies mainly on the side of the Greek authorities. Finding an agreement is first and foremost in Greece’s interest.”

Whether Greece manages to remain afloat throughout the summer, when the largest part of this year’s debt repayments come due, without the bailout installment that the Eurogroup controls is still very much a mystery. Greece’s Mr.Varoufakis remains hopeful that a deal can be reached before the end of June though very few of his EU counterparts seem to share the same overriding optimism.

 


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