ATHENS – German Chancellor Angela Merkel is squeezing Greece to deliver on commitments to carry out reforms, stressing before a meeting of Eurozone finance ministers that she wants the country to remain in the common currency.
Merkel said in a speech to the German Parliament ahead of the June 18 Eurozone meeting that that Greece’s government in February “committed itself to comprehensive structural reforms. These must now be tackled with determination.”
Merkel, whose country has put up the bulk of 240 billion euros ($270.34 billion) in two bailouts from international lenders, stressed that “Germany’s efforts are directed to Greece remaining in the Eurozone.”
She reiterated that “where there’s a will, there’s a way — if the political leaders in Greece show this will, an agreement with the three institutions is still possible.” That was a reference to Greece’s international creditors.
Greece needs to unlock loans from its creditors before June 30, when its bailout program expires but Prime Minister Alexis Tsipras has been locked in a war of words with the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which wants him to impose more austerity before releasing a long-delayed 7.2-billion euro ($8.1 billion) installment needed to keep the country from defaulting and crashing out of the Eurozone.
Reform talks have faltered and Greece refused to even bring a new list to the Eurozone meeting setting the stage for a showdown as the country goes broke and said it can’t pay the IMF some 1.6 billion euros ($1.8 billion) it owes in bundled options due the end of June, when a four-month bailout extension runs out.
NO BREAKTHROUGH SEEN
Expectations were low for any chance of an agreement at the Luxembourg meeting especially after Finance Minister Yanis Varoufakis said he wasn’t even bringing a new, revised list of reforms after all his previous efforts – criticized as vague outlines – were tossed in the rubbish by the troika as unacceptable.
Tsipras and European Commission President Jean-Claude Juncker, who had engaged in a verbal feud over what was allegedly said in private meetings, spoke on the phone on June 17 but nothing reportedly developed beyond that they were talking to each other again.
A European official told journalists that he expects the discussion regarding Greece at the Eurogroup to be brief as creditors were expecting new proposals that the government said aren’t going to be delivered.
“The margins for new cuts in pensions have been exhausted,” said Tsipras after meeting Austrian Chancellor Werner Faymann in Athens. “We can’t understand the obsession of the lenders with pension cuts.”
“If we don’t have an honorable compromise and an economically viable solution, we will take the responsibility to say a big no to the continuation of a catastrophic policy,” he said.
Asked during a visit to the offices of the Organization for Economic Cooperation and Development in Paris whether he thought a deal could be reached at the Eurogroup, Varoufakis said: “I don’t think so. Now it is up to political leaders to arrive at an accord.”
Faymann said he coordinated his visit with Juncker and was hopeful that an answer could be found even though he said he doubted it could.
“I can’t see a solution lying before me but I see that if we are convinced we want one, we have a good chance,” said the Austrian.
German Finance Minister Wolfgang Schaeuble told the finance committee in Germany’s lower house that, while he remains hopeful Greece and its creditors will reach an agreement by June 30, the German government is also preparing for failure, two lawmakers told Bloomberg.
“We can’t offer further compromises,” said Eckhardt Rehberg, a Christian Democratic lawmaker. “It’s the Greek people, ordinary citizens, who will have the biggest problems if there’s a default, with no agreement or solution.”
(Material from the Associated Press was used in this report)
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