Brussels, 20/07/2012 (Agence Europe) - Greece shall and must remain part of the eurozone, insisted the European Commission on Monday 23 July 2012 in the wake of growing concerns expressed in the media, while admitting that the country had fallen far behind in its implementation of the reforms required by its international lenders in return for the recent financial aid package.
The Commission's comments come at a time when Athens is finding it difficult to get a structural adjustment programme up and running and as the latest troika fact-finding mission was due to arrive on Tuesday (the troika being the European Commission, the European Central Bank and the International Monetary Fund). The troika fact-finders will be examining progress in implementing the structural adjustment programme, after which they will say whether the next instalment of aid should be paid. The Commission says the aid will be paid in the near future, in September at the earliest. Asked about Greece's ability to reimburse the Greek bonds owned to the European Central Bank that mature on 20 August this year, the Commission repeated the 10 July comments by the head of Eurogroup, Jean-Claude Juncker, that there was nothing to worry about as a solution would be found (see EUROPE 10652).
Greece's lenders seem to be losing patience. The European Central Bank announced on Friday 20 July that for the moment it will not be accepting Greek bonds as guarantees (see EUROPE 10660), and the website of German newspaper Der Spiegel reported at the weekend that the International Monetary Fund would not be supplying any extra funding for Greece. Der Spiegel explains that a number of German parliamentarians are furious that Greece is taking so long to meet its commitments. The Süddeutsche Zeitung cited an unnamed German government official as saying it was “inconceivable that Chancellor Angela Merkel would again ask the German parliament for approval for a third Greek bailout package”.
The Greek government has recognised that it has fallen behind because of the general elections in May and June this year. Greek finance minister Yannis Stournaras will be meeting with the troika fact-finders on Thursday 26 July, and will submit to them a package of cuts unveiled on 18 July, which will make savings of €11.5 billion over two years. Athens has several times mooted the idea of being granted longer to meet its commitments, an idea rejected by Germany and the IMF (see EUROPE 10655 and 10658). Der Spiegel says the troika says that if Greece was given more time, then it would need an extra €10 billion to €50 billion. The Commission is awaiting the troika's fact-finding report before it comments on timing. (EL/transl.fl)