Greece’s finance minister was locked in talks with skeptical creditors on Saturday, trying to persuade them that the Greek government can be trusted to deliver on its reform promises in exchange for a financial rescue securing the country’s future in the euro.
After convincing the Greek parliament in the early hours of Saturday to back a harsh austerity package to stave off financial collapse, the Greek government is facing a difficult task getting its European creditors to support its three-year bailout request. Over and over, finance ministers and top officials of the eurozone said the same thing as they arrived for a key meeting on Greece’s bailout proposals — we don’t fully trust you.
Greece, they said, needed to do a lot more than just publish a 13-page plan of reform commitments before they could sign off on another multibillion-euro bailout deal that would keep the country afloat and prevent its exit from the euro.
A European official at the talks said creditors want “more specific and binding commitments” from the Greek government.
The official, who spoke on condition of anonymity because he’s not authorized to talk publicly, says there’s a general feeling in the room that the Greek proposals are “too little, too late” and as such, more proof of the government’s commitment to follow through is required. The official said those pledges don’t “necessarily have to be austerity measures.”
That sentiment echoes much of the language in the run-up to the meeting.
Greece is running out of time to convince its creditors. A Sunday summit of European Union leaders could be its last chance to prevent the collapse of the banking sector and an inevitable exit from the euro currency.
Greece’s banks have been shuttered for the best part of two weeks and daily withdrawals from ATMs have been limited to a paltry 60 euros. The economy is in freefall and the country faces a raft of big debt repayments.
Early Saturday, Greek Prime Minister Alexis Tsipras cleared one hurdle. Lawmakers in the Greek parliament overwhelmingly backed a package of economic reforms and further austerity measures, in the hope that it will convince its European partners to back a third bailout of the country. Greece has made a request to Europe’s bailout fund for a 53.5 billion-euro ($59.5 billion) 3-year financial package.
Still, the measures proposed, which include changes long-demanded by creditors, such as changes to pensions and sales taxes, don’t appear to be enough, just yet. Following months of deteriorating relations, creditors are demanding firm legislative action to back up the proposals.
Earlier, German Finance Minister Wolfgang Schaeuble, who has taken a hard line on Greece over recent months, said the Greek government will have to do a lot more than just say it wants to reform if it’s going to get more money.
Greece hopes enough progress will be made at Saturday’s finance ministers meeting to allow EU government leaders on Sunday to formally back a bailout program. The summit of the European Union’s 28 leaders has been billed as Greece’s last chance.
The eurozone ministers have to give their blessing to Greece’s bailout request to the European Stability Mechanism. Traditionally, eurozone ministers agree by mutual consensus. The task facing the new Greek finance minister, Euclid Tsakalotos, is to convince his skeptical counterparts that Greece deserves another bailout, which would be its third in five years.
Greece has received bailouts totaling 240 billion euros in return for deep spending cuts, tax increases and reforms from successive governments. Though the country’s annual budget deficit has come down dramatically, Greece’s debt burden has increased as the economy has shrunk by a quarter.
The Greek government has made some form of debt relief a key priority and will hope that a comprehensive solution will involve European creditors at least agreeing to delayed repayments or lower interest rates.
Report by Associated Press.
Eurozone finance ministers meet on latest Greek proposal
Greece’s Eurozone partners are again doubtful of a last-ditch bailout deal worth more than $89 billion. They say talks to stop an exit from the Eurozone are extremely difficult, because trust in Athens has collapsed. A Finance Ministers meeting on Saturday stretched through most of the night, and will resume on Sunday ahead of an EU heads-of-state meeting. CCTV’s Jack Barton filed this report from Brussels.