Brussels, 16/04/2015 (Agence Europe) - On 16 April, the European Commission said that not enough progress has been made to date between Greece and its lenders.
“We are continuing to work with the other institutions and the Greek authorities, talks are ongoing. At this stage, we are not satisfied with the level of progress made so far, work needs to be intensified before the next Eurogroup meeting” in Riga on 24 April, explained European Commission spokesperson Margaritis Schinas. Pointing out that the “Main players involved in this subject are all in Washington (at the weekend for the spring summits of the IMF and World Bank), we still hope this interaction at all levels will produce the progress we'd like to see,” said Schinas. As far as he knew, the Brussels Group (of the Greek government, the European Commission, the IMF and the EFSF) will not be meeting physically in the near future.
The Commission's comments come the day after live comments by German finance minister Wolfgang Schäuble that “Nobody expects there will be a solution (before the Eurogroup meeting on 24 April, Ed.). The key is in Greece, they have to find a solution.” Noting that the economy has “delivered better numbers than it was assumed in the programme, but now the new government has destroyed all the numbers and it is now difficult to come back, nobody has any idea how to agree on a more ambitious programme.” The German minister added: “Greece is part of Europe, the EU knows we have common responsibility, and whatever happens we will stick to our responsibility.” He refused to speculate on a possible Grexit (Greece leaving the eurozone). He pointed out, however, that the Greek problems had not spread in the market to the rest of the eurozone.
The European Commission had been nursing the hope of receiving a full list of Greek reforms by 20 April in order to have time to prepare for the Eurogroup meeting. Greece has thus far said it was confident that agreement will be reached at the 24 April meeting. A lot is at stake because the Greek public purse is dwindling, as Athens has warned its partners on a number of occasions. The Financial Times says Greece has tried to negotiate extra time for repaying its loan instalments to the IMF (nearly a billion euros is due in two payments in May) but the IMF refused. In order to meet its upcoming payments, the Syriza government was planning to use the capital of Greek public enterprises. It needs to pay nearly €2 billion at the end of the month in pension payments and public service pay.
The United States is showing signs of concern about the talks dragging on. Greece and its lenders need to reach an agreement to avoid events such as a Greek exit from the euro, which would cause “an enormous amount of disruption and hardship,” US Treasury Secretary Jacob J. Lew said in an interview cited by Bloomberg. On Friday, he will be meeting the Greek finance minister, who held a meeting on Thursday with the US president, Barack Obama.
On Thursday, Greece saw its borrowing rates shoot up, with the ten-year bond rate rising to 13%, the highest since December 2012, and the three-year rate reaching 28.23%, the highest since March 2012. In the light of the situation, credit rating agency Standard and Poor's downgraded Greece's rating on Wednesday from B- to CCC+ with negative prospects. (Elodie Lamer)