Brussels, 23/08/2012 (Agence Europe) - Eurogroup President Jean-Claude Juncker has granted the Greek authorities a “last chance” to prove that they are able to keep their commitments made under the 2nd financial rescue plan for Greece. He was speaking on Wednesday 22 August after a meeting with Greek Prime Minister Antonis Samaras, Reuters reports. “As far as the immediate future is concerned, the ball is in the Greek court”, Juncker said. “In fact this is the last chance and Greek citizens have to know this”. He added that the Greeks were struggling with a “credibility crisis”, while reiterating that he was against Greece exiting the eurozone as, in his view, this would “entail major risks for the whole euro area”.
First and foremost, the coalition government of Greece should come to an agreement on the €11 billion in savings to be approved over two years. This could be €13.5 billion due to the delays incurred in implementation of the 2nd Greek programme and the recession that has hit harder than expected. The objective set out in the Greek memorandum is to bring public deficit back under control by 2014. This would require implementation of unpopular measures such as reducing salaries and pensions higher than €800 (see EUROPE 10671), with the risk that this could trigger an even deeper recession. In 2011, Greece's public deficit was 9.3%. Juncker then urged the Greek authorities to do more regarding reform of the Greek economy and privatisations.
No decision relating to the granting of a further bailout of around €30 billion will be taken until European finance ministers have studied the final report from the “troika” (European Commission, ECB and IMF) on the state of progress of the 2nd Greek programme. It will not be easy to finalise that report before the informal Ecofin Council scheduled for mid-September in Nicosia. A final decision is therefore not expected until October. Speaking on Wednesday, German Chancellor Angela Merkel told AFP that they were waiting for the “troika's” report and that only then would they come to a decision.
The German leader also warned that one should not expect any final “solutions” on Greece to come out of the discussion that she is to have with Samaras in Berlin on Friday. “Our meeting will not just cover economic issues but also deeply political matters linked to the future of Europe as a whole”, she said on Wednesday during a visit to Chisinau (Moldova). Hoping to prove it is indeed worthy of Europeans' confidence by keeping its commitments, the Greek head of government nonetheless said: “All we want is a bit of air to breathe”. “More time does not automatically mean more money”, he told Germany's Bild newspaper. On Thursday evening, Merkel will have met with French President François Hollande to take stock of the sovereign debt crisis in the eurozone and, on Saturday, Hollande will also be holding an exchange of views with Samaras. (MB/transl.jl)