Tuesday 27 June 2017

Merkel warns Greece to stop dragging its heels

French President Nicolas Sarkozy and German Chancellor Angela Merkel attend a news conference at the Elysee Palace in
Paris, yesterday following a Franco-German intergovernmental meeting. Photo: Reuters
French President Nicolas Sarkozy and German Chancellor Angela Merkel attend a news conference at the Elysee Palace in Paris, yesterday following a Franco-German intergovernmental meeting. Photo: Reuters

Lefteris Papadimas and Daniel Flynn

Time is of the essence, she says, after latest delay by Athens in striking deal over €130bn rescue plan

German Chancellor Angela Merkel told Greece yesterday to make up its mind fast on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day.

Failure to strike a deal to secure the €130bn rescue -- much of which Germany will fund -- risks pushing Athens into a chaotic debt default which could threaten its future in the eurozone.

Speaking in Paris, Ms Merkel expressed the exasperation spreading among eurozone leaders at seemingly endless arguing in Athens that has yet to produce a definitive acceptance of the austerity and reform conditions demanded by the lenders.

Stakes

"I honestly can't understand how additional days will help. Time is of the essence. A lot is at stake for the entire eurozone," she told a news conference with French President Nicolas Sarkozy.

But leaders of the three parties in the Greek coalition government appeared to need at least one additional day.

The office of Prime Minister Lucas Papademos, a former central banker who heads a government of politicians, said that a meeting of leaders from the conservative, socialist and far-right parties due yesterday had been postponed until today.

A statement issued shortly after Ms Merkel spoke gave no reason for the delay but said Mr Papademos would hold further talks with the troika of lenders -- the European Commission, European Central Bank and IMF -- later yesterday.

The party leaders, positioning themselves for a likely general election in April, have baulked at accepting another package of deeply unpopular wage and pension reductions, job cuts and tougher tax enforcement measures. Ms Merkel made it clear that her patience was wearing thin on a deal that affects not only Greece but the wider currency bloc, which fears that a default would hit much larger economies such as Spain and Italy.

In a fresh sign of mistrust, the German leader said she and Mr Sarkozy agreed Greece should deposit revenue to meet future interest payments in a special escrow account to guarantee that creditors were paid consistently.

"We want Greece to stay in the euro," she said. But she added: "I want to make clear once again that there can be no deal if the troika proposals are not implemented. They are on the table ... Something needs to happen quickly."

The troika wants 15,000 public sector jobs cut by the end of this year, as part of a 150,000-job reduction by the end of 2015, public administration minister Dimitris Reppas said.

In Brussels, the European Commission defended the troika's demand for a cut in the minimum wage. Commission spokesman Amadeu Altafaj said the Greek minimum wage averaged €871 a month, compared with €748 in Spain, which is not under an EU/IMF rescue programme. (Reuters)

Irish Independent

Promoted articles

Also in Business