Europe loses patience with Greece

BRUSSELS - Reuters

People receive agricultural produce offered for free by protesting farmers during a protest in Thessaloniki, northern Greece on Feb 4. In the meantime, the eurozone finance ministers were bargaining on new austerity measures with the debt-hit country’s government. AP photo

Eurozone finance ministers told Greece Saturday it could not go ahead with an agreed deal to restructure privately-held debt until it guaranteed it would implement reforms needed to secure a second financing package from the eurozone and the IMF.

Eurozone ministers had hoped to meet today to finalize the second Greek bailout, which has to be in place by mid-March if Athens is to avoid a default on its debt. But the meeting was postponed because of Greek reluctance to commit to reforms. Instead, the ministers held a conference call Saturday to take stock of progress on the second financing package, which eurozone leaders set at 130 billion euros back in October.

“There was a very clear message that was conveyed from all participants of the teleconference ... to the Greeks that enough is enough,” one eurozone official said. “There is a great sense of frustration that they are dragging their feet.”

“They should get their act together and start talking honestly, decisively and speedily with the Troika on the aspects of the program that remain to be finalized - on fiscal and labor market reforms,” the official said.

The Troika are the representatives of the European Commission, the European Central Bank and the International Monetary Fund (IMF), who have prepared a Greek debt sustainability analysis on which the second financing program will be based.

“The main issue is the lack of reform, or prior action, in Greece,” a second eurozone official said.
Eurozone ministers were also dissatisfied with Greek Finance Minister Evangelos Venizelos because they believed the minister was paying more attention to his position within his party ahead of the April elections, than to talks about reforms.

‘Busy with campaigning’

“There is a great sense of frustration with Minister Venizelos, who is very hard to get hold of because he is very busy campaigning for the leadership of (the Greek party) PASOK, so he is not available to meet with Troika members,” the first official said.

“There is an increasing sense of frustration that why should we honour our part of the bargain, which we have in the past, while Greece does not seem to care that much, and has not delivered their part of the bargain,” the official said.

In Athens, Venizelos admitted to a growing sense of impatience with the Greeks. “There is great impatience and great pressure not only from the three institutions that make up the troika but also from eurozone member states,” Venizelos said after what he called a “very difficult” conference call with eurozone counterparts. Jean-Claude Juncker, who chairs the Eurogroup of eurozone finance ministers, voiced the possibility of default.

Greece has secured a debt restructuring deal with private creditors to halve the value of Greek debt in nominal terms and in exchange receive new, 30-year bonds with an average coupon below 4 percent, officials said. The restructuring is to help make Greek debt sustainable by cutting it to 120 percent of gross domestic product (GDP) in 2020 from 160 percent today.

The eurozone expects Greek politicians to come up with a consensus on reforms today.