Tuesday 27 September 2016

Michael Noonan warns Greece to rebuild trust with Europe ahead of crunch talks

Niall O'Connor and Ralph Riegel

Published 11/07/2015 | 14:13

Greece's future in the eurozone looks set to be decided at an emergency summit of the heads of State tomorrow.

  • Go To

Crisis talks involving euro finance ministers are continuing tonight in Brussels with sources saying that Greece is making a "credible effort" to strike a deal.

The meeting, which is being attended by Michael Noonan, broke for dinner just after 7pm Brussels time.

Ministers are set to examine in detail Greek's proposals for a three year bailout when the meeting resumes.

Meanwhile, the office of Greek Prime Minister Alexis Tsipras has rejected a media report that German Finance Minister Wolfgang Schauble wants Greece to exit the euro for five years and be given a humanitarian aid package.

The German finance ministry refused to comment on the report, which is due to appear in a Frankfurt newspaper tomorrow.

It now looks likely that Taoiseach Enda Kenny will attend an emergency summit to discuss the Greek proposals in Brussels tomorrow.

Speaking ahead of the meeting, Michael Noonan warned Greece that it must rebuild trust with its eurozone partners.

The Finance Minister said he is hopeful that a "sustainable, medium term programme" can be agreed but that this will be on the condition that Greece delivers a suite of reforms.

Mr Noonan said previous debt deals secured by Ireland, Spain and Portugal were predicated on "trust" and that this is a central component for today's talks.

The Fine Gael politician described last weekend's referendum as having a "disastrous" impact on the Greek economy.

And he said that if Greece is to rebuild its trust with its eurozone partners, it would be helpful if reform measures agreed in Athens last night are implemented in the coming weeks.

"A lot of people today will be concerned as well that the Greeks should move and start implementing measures immediately because the parliamentary majority of the Government now in Athens is being eroded and they may not have the capacity to implement the measures they have agreed as time goes by," Mr Noonan told reporters.

"To get back to your trust question, it would certainly build up trust if they stayed in parliament next week and the week after and start implementing, by way of legislation, what they have now agreed to support," he added.

Today's meeting of the eurozone Finance ministers is seen as critical in determining the future of Greece's place in the euro.

The eurozone's heads of state, including Taoiseach Enda Kenny, are on standby for an emergency summit tomorrow if required.

But there have been mixed signals from member states as to whether a deal will be agreed for Greece.

Speaking ahead of the talks, Dutch State secretary Eric Wiebes said he is "very worried" about Greece's commitment to reform.

Germany, which is one of Greece's largest creditors, is also deeply sceptical.

Meanwhile, on the issue of Ireland's contribution to any such bailout fund, Mr Noonan said it would be through the European Stability Mechanism and therefore would have have no impact on the upcoming budget.

"But since the funds will be drawn down principally from the ESM, and we already have contributed to the ESM, and will continue to do so on an annual basis, whatever the Irish liability is, it won't have an immediate budget impact," Mr Noonan  said. 

"As years go by, we will be incurring a liability, but that liability wouldn't be called in if everything went well," he added.

Mr Noonan said that while the No vote in last weekend's extraordinary Greek referendum was a political victory for ruling party Syriza, it has had a profoundly negative impact on the Greek economy.

"The Greek position has been difficult. The new Government went in after the Greek people had rejected the impositions of what was put on in the past. So they had a difficult talk . It would be better if what's happening now happened last February because quite a bit of damage was done," the Limerick TD said.

"But if you look at the referendum, while it was a great political victory for the Greek Government, it was a disastrous economic and social out turn. And significant damage has been done to the banking system and to the wider economy," he added.

Meanwhile, Enda Kenny said he was now "very optimistic" that a third bail out package would be agreed to keep Greece in the Eurozone and stabilise the struggling Greek economy.

Mr Kenny confirmed he is on standby to fly to Brussels on Sunday with the other 18 EU leaders to sign-off on the new Greek bail out package if required.

But he said the developments in Athens over the past 72 hours were very encouraging and he expressed optimism that a deal can now be struck.

Prime Minister Alexis Tsipras got the Greek Parliament to ratify the proposed third bail out package and its reforms despite the fact many of its conditions are tougher than previous deals which were rejected.

Street protests have erupted in Athens over some of the terms of the new bail out package.

"I hope it goes in the direction of the agreement of the meeting last Tuesday of the Eurozone leaders where the Prime Minister (Tsipras) was expected to lodge an application for a third programme," Mr Kenny said.

"He has now done that and he was to follow that up with specific proposals from Greece which have been tabled. These have been adopted and supported by the Greek Government."

"These are being assessed by the institutions and are now being discussed by the Eurozone (finance) ministers."

"If it can be concluded there, so much the better. If that is not the case then clearly the leaders of the full European Council will be summoned to Brussels (Sunday)."

Mr Kenny said it was important to realise that there is strong support for keeping Greece in the Euro.

"Of the 19 leaders at the Eurozone meeting last week, 18 of them outside of Greece were very adamant that whatever should be done must be done to keep Greece as a functioning member of the Eurozone."

"Prime Minister Tspiras was very clear about what his intentions were in complying with requirements in terms of continuing to have Greece as a functioning member."

"Instability has caused great hardship for ordinary Greek people. The leaders of the Eurozone were very adamant in their encouragement and their support, with conditions attached of course, for Greece."

Mr Kenny said the priority for everyone now was to offer economic stability for Greece.

"This is called democracy. It is perfectly democratic for the Greek Government to call a referendum. They did that and the people voted. The Government are perfectly entitled in Greece this is now what we are going to do in order to present a case and remain a functioning member of the Eurozone."

"Other countries in the Eurozone are kept together by multi-party situations where they are required to put issues like this to their various parliaments such as Finland, the Netherlands and Germany."

"If a third programme is finally approved that will have to be signed-off by various Governments as well."

"But from my point of view I would be very optimistic, I have to say, because I think it can all be put together. If that is the case, and I hope that will be the case, it will demonstrate once again that Europe functions well when it puts its mind to it."

"I just hope this is not premature and that the Eurozone group meeting can be concluded. But the important thing is that the Greek Parliament have endorsed the proposals tabled by Prime Minister Tspiras."

Online Editors

Read More

Promoted articles

Editors Choice

Also in Business