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ATHENS – Doing almost nothing to come up with an acceptable list of reforms, Greece will not get critically-needed hoped-for aid from the Eurozone at an April 24 meeting with warnings growing its failure to act is heading toward a debt default and exit from the financial bloc.

The new coalition government led by Prime Minister and Radical Left SYRIZA leader Alexis Tsipras on Feb. 20 was given a four-month bailout extension on condition he present reforms to meet fiscal targets.

Instead, with cash dwindling fast as the country is essentially locked out of the markets and hunedres of millions of euros are being yanked from bank accounts each day by nervous depositors, European Union officials said the government is dragging its feet and spending precious time arguing over undone demands.

European Commission Vice President Valdis Dombrovskis told Germany’s Handelsblatt that the April 24 meeting of the Eurogroup in Riga, Latvia, will not approve aid for Greece.

“There will only be a look at the progress in talks,” he said, adding that Athens should submit a list of updated reform proposals by April 20.

The head of the European Stability Mechanism (ESM), Klaus Regling, told Portuguese media that Greece, despite a number of chances, has not yet submitted a “coherent” list of proposals and noted that the country’s “liquidity buffers are becoming very, very small.”

European Economic and Monetary Affairs Commissioner Pierre Moscovici also underlined that creditors were awaiting a list of “precise reforms” from Greece.

All that belied talk by Tsipras would not default or leave the Eurozone and that there has been good progress in negotiations at the same time the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that has put up 240 billion euros ($260 billion) in two rescue packages said there has been none.

EU officials said the snag is that Tsipras is caught between trying to keep anti-austerity campaign promises, most of which he has already broken, and to come up with reforms to satisfy the lenders.

They said that Greece refuses to cut spending, re-start a stalled privatization program or cut already-decimated pensions, a non-starter for Tsipras who said he would not go after the elderly as did two previous governments dominated by the New Democracy Conservatives and the PASOK Socialists who were bounced out of power in January for it.

The EU is also disgruntled that the government has moved to provide some relief to those most affected by big pay cuts, tax hikes, slashed pensions and worker firings and is opposed to helping the poor, workers and elderly so that lenders and banks get paid first.

Labor Minister Panos Skourletis insisted that Greece will not cut pensions while Alternate Finance Minister Dimitris Mardas indicated that the Value-Added Tax might be raised on some goods, showing further contradictions from a government which said it would cut taxes.


Meanwhile, Finance Minister Yanis Varoufakis, who has given the troika only vague outlines as part of what he admitted is a plan of “constructive ambiguity” to confuse them, went to Washington, D.C. for critical meetings, including with President Barack Obama and Vice-President Joe Biden.

Varoufakis is in the US for meetings at the World Bank and the IMF and is also scheduled to talk with visiting ECB President Mario Draghi as well as US Treasury Secretary Jack Lew and Italian Finance Minister Pier Carlo Padoan.

Greece is increasingly finding itself isolated it a combative approach with the troika, which has failed to blink at Tsipras’ threat that Greece could leave the Eurozone and bring down the financial bloc with it.

He said, however, that Greece will keep paying its debt after he said that it wouldn’t, and also denied there would soon be new snap elections as a referendum on his vacillating approach with the lenders, which has earned big praise and support from Greeks who back him for taking on the lenders, but say they don’t want Greece pushed out of the Eurozone.

ECB Governing Council member Klaas Knot warned that a Greek default may have a contagion effect. “The already shaky liquidity position of Greek banks will worsen if deposits continue to flow out,” Knot said in the Dutch central bank’s semi-annual Financial Stability Report.

“An unhoped-for bankruptcy of the government would heavily derail the Greek economy,” he said, adding that “the impact of such an event on other countries in the euro area is still uncertain.”

The EU’s foreign policy chief Federica Mogherini said Europe be flexible in dealing with Greece, however, “not just out of a sense of solidarity but most of all for sake of the common interest.” “If one falls, the whole system falls, I’m very much convinced of that,” she said.

German Foreign Minister Frank-Walter Steinmeier advised against “frivolous” talk of a Greek Eurozone exit. Germany is the biggest contributor to the loans but has been the hardest taskmaster, demanding austerity while rejecting out of hand Tsipras’ calls for debt relief.

The post As Debt Default Talk Grows, Greece Fritters Away Last Loan Hopes appeared first on The National Herald.

Source: The National Herald
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