EUROZONE-GREECE/EUROGROUP ARRIVALS MORE Wary eurozone to pass bailout judgment on Greece

Record ID: 147603

  • Title: EUROZONE-GREECE/EUROGROUP ARRIVALS MORE Wary eurozone to pass bailout judgment on Greece
  • Date: 11th July 2015
  • Summary: BRUSSELS, BELGIUM (JULY 11, 2015) (REUTERS) SPANISH FINANCE MINISTER, LUIS DE GUINDOS, ARRIVING
  • Embargoed: 26th July 2015 13:00
  • Keywords:
  • Location: Belgium
  • Country: Belgium
  • Topics: General
  • Reuters ID: LVAB3LYY9LGJ4V2GOWMK4H5XGD3A
  • Aspect Ratio: 16:9
  • Story Text: Sceptical European finance ministers gathered on Saturday (July 11) to decide whether to negotiate a third bailout for Greece after Prime Minister Alexis Tsipras won lawmakers' backing for painful austerity measures his leftist party was elected to prevent.
    With Athens staring at a bankruptcy that could see it crash out of the eurozone after financial markets reopen on Monday (July 13), EU officials forecast agreement would be reached by the end of the weekend to keep Greece afloat, but not before ministers and government leaders had vented their wrath at Tsipras.
    A number of ministers arriving for the Eurogroup meeting spoke of a fundamental lack of trust after years of broken Greek promises and a snap referendum Tsipras called, in which voters massively rejected creditors' terms he has since had to embrace.
    However, sources familiar with a preparatory meeting earlier on Saturday said ministers' aides had endorsed with reservations a recommendation by EU institutions and the IMF that Tsipras's proposals did provide a basis to launch negotiations.
    "We are not there yet, both on substance - there is still a lot of criticism on the proposals, on the reform side, on the fiscal side and there is of course a major issue of trust. Can the Greek government be trusted to actually do what they are promising, to actually implement in the coming weeks, months, years? And I think those are the key issues that will be addressed today. So, difficult meeting," Eurogroup chair Jeroen Dijsselbloem said.
    Wolfgang Schaeuble, finance minister of its biggest creditor Germany and a veteran stickler for the EU's fiscal rules, said negotiations would be "exceptionally difficult".
    "The problem is that that there was a situation at the end of the year that was very hopeful, despite all the scepticism of previous years, and that this was destroyed in an incredible way in the last days and hours," Schaeuble told journalists in Brussels.
    Several ministers said they want to see swift enactment by parliament to show that Greece was serious this time.
    A positive assessment of the Greek proposals delivered by the European Commission, European Central Bank and International Monetary Fund late on Friday, along with bullish comments from Athens' key eurozone ally France, had raised expectations that the Eurogroup would give a green light to new loan negotiations.
    But even French Finance Minister Michel Sapin, Greece's most powerful ally in the eurozone, said that the Greek government had to "re-instill confidence".
    "It's up to the Greek government to bring information to re-instill confidence, which has not been damaged by this government, but by every Greek government over many years which have sometimes made promises without making good on them at all. Today we need to have confidence again, to have certainty that decisions which are spoken of are decisions which are actually taken by the Greek government," Sapin said.
    A senior EU official said the Eurogroup talks would include discussions on whether Greece needs some debt relief.
    "Is the debt sustainable, as one says? And if it, under which conditions ? This is one of the issues on the table. From the beginning France has always said two things. Firstly, there is no taboo about the debt. We have the right to talk about the debt. Secondly, we don't want there to be reduction in the nominal value of the debt because that is a red line for many of the member states in the Eurogroup," Sapin said.
    Slovak Finance Minister Peter Kazimir, one of the most hawkish critics of Greece, said making the country's debt sustainable was going to be "a huge problem".
    "This package would be appropriate for the completion of the second programme, but I'm afraid this is not enough for the third programme, for the ESM programme," Kazimir said referring to Eurozone's bailout programme called the European Stability Mechanism or ESM.
    In Athens overnight, Tsipras had to rely on opposition votes from the right in parliament after some of his leftist lawmakers resisted spending cuts, tax rises and other measures he proposed in order to unlock 54 billion euros in three-year credit.
    Spain's Finance Minister, Luis de Guindos, said that "everyone" wants Greece to remain in the single currency.
    Eurozone leaders, including German Chancellor Angela Merkel and French President Francois Hollande, are due to meet on Sunday (July 12), either to endorse the ministers' verdict or, along with other EU leaders, to take steps to contain the fallout from a looming Greek bankruptcy.
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