Brussels, 09/02/2015 (Agence Europe) - On Monday 9 February, two days ahead of the Eurogroup meeting to prepare the ground for the work on the financing of Greece ahead of an agreement hoped for on 16 February, the member countries of the eurozone drew their red lines in the sand.
On the same day, the European Commission explained that it was doing its best to facilitate the discussions. “The Commission is making all efforts and contacts necessary at technical level to prepare for the meeting of the Eurogroup under the best possible conditions”, said Commission spokesperson Margaritis Schinas, who was asked about the meeting in Athens between the representative of the Commission in the troika, Declan Costello, and president of the euro working group, Thomas Wieser.
Tougher debates in sight
Although there is hope in some quarters that an agreement will be reached on 16 February, before the programme expires, it cannot be denied that the discussions are likely to be difficult.
The president of the Commission, Jean-Claude Juncker, set the tone on Monday morning. “Greece should not assume that the general feeling in Europe has changed so much that the eurozone would accept the Tsipras government programme without any limitations”, he said on a visit to Germany, where he met the Socialist party. Juncker also said that Tsipras had only touched upon the concerns expressed by certain countries of the eurozone in his speech to the National Parliament.
Speaking from Istanbul, the French finance minister, Michel Sapin, stressed the need to “secure financing, without which Greece would be at the mercy of any panic situation on the markets, but we cannot simply say 'we'll pay, we'll pay'”. However, the quid pro quo for any support must be Greece's adherence to the European rules, the French minister added.
Portugal and Ireland said that if Greece enjoyed special conditions, these should be applied across the board. Simon Coveney, the Irish Minister for agriculture, told the radio station RTE that if a new offer was on the table for Greece, “then Ireland is open to look at that but we will insist that any new or better deal applies to Ireland as well as Greece”.
Pedro Passos Coelho, the prime minister of Portugal, reiterated that specific solutions had already been found for Greece, such as giving the country extra time to pay off its debt. The solutions reached today “must apply to all”, he added. In Cyprus, the President of the Chamber, Yiannakis Omirou, sent out positive signals, recommending an alignment of the Cypriot position on that of Greece in any change of mindset regarding the bailout plans.
In response to Greek calls for transition financing until the end of May, to give the country time to make proposals for a long-term agreement, the German minister, Wolfgang Schäuble, replied that if Athens wanted the Eurozone's help, it would have to have a programme in proper form. Greece “is subject to a programme until the end of February, I do not know what the markets would do without a programme, but maybe Mr Tsipras knows better than I do”, Schäuble added, also speaking from Istanbul. He explained that he still did not understand “how the Greek government plans to tackle this”. “The end of the crisis will not come if we say yes to another bailout programme”, the Greek finance minister, Yanis Varoufakis, told the national parliament on 9 February.
Some people appear sceptical about the chances for success of talks between Greece and its international creditors. The British Prime Minister, David Cameron, tweeted that “given the uncertainty around Greece & the euro, it was important I chair a meeting to ensure the government is prepared for all eventualities”.
The day before, in an interview with Italy's RAI, Varoufakis warned against a 'Grexit'. “The euro is fragile, it's like a house of cards, if you take away the Greek card, all of the others will fall too”, he said. “I warn anybody who is thinking of strategically amputating Greece from the EU, because that would be extremely dangerous”, he continued. “After us, who would be next? Portugal? What will happen when Italy realises that it is impossible for it to stay in the straitjacket of austerity?” He went on to explain that he had been approached by Italian representatives of “a major institution” who pledged their support to him, but cannot “say it out loud because Italy also risks bankruptcy and they are afraid of Germany's reaction”. He also said that Italy's debt was “untenable”, to which the Italian Minister Pier Carlo Padoan reacted on Twitter, stating that the Italian debt was “solid and viable”.
In his speech before the national parliament on Sunday, the Greek Prime Minister, Alexis Tsipras, explained that he wished to increase the income tax threshold to 12,000 euros a year (compared to 5,000 euros at the moment) and to phase in an increase of the minimum wage from 586 to 741 euros a month, between now and 2016. He also announced: the cancellation of the real estate tax, a thirteenth month for monthly pensions under 700 euros, the reopening of the public channel ERT, his plans to re-hire civil servants made redundant, in the framework of the recruitment plan for 2015, a halt to privatisations, the launch of an investigation into how the country ended up having to ask for financial assistance and, lastly, an application for compensation from Germany over the Second World War.
“We have only one commitment - to serve the interests of the people, the good of society”, said Tsipras, referring to the “irrevocable decision (of his government) to implement campaign promises in their entirety”. Although his tone is extremely decisive in Greece, it has been said that behind the scenes of the eurozone, the Greeks are being somewhat more conciliatory.
From Austria, where he was meeting Chancellor Werner Faymann, Tsipras said that he was optimistic of the chances of a compromise with the eurozone.
If no agreement can be reached before the programme ends on 28 February, Greece will lose seven billion euros in aid. The envelope of €10 billion reserved for the Greek banks will also be lost. However, eurozone sources have said that what with capital drains, the banks could have further recapitalisation requirements, even though the possibility was once discussed that this money could be used for other needs of the government. An ECB source stresses that Greece has always been advised not to use that money for any purpose other than the banks. (Elodie Lamer)