Friday 23 February 2018

Spain criticises Greece over talks

Luis de Guindos said he hopes there will be progress in the negotiations, but warned that time was running out (AP)
Luis de Guindos said he hopes there will be progress in the negotiations, but warned that time was running out (AP)

Spain's economy minister Luis de Guindos criticised Greece's left-wing government for its "not very coherent" approach to negotiations over its finances.

"We have wasted very precious time over the last three or four weeks," he told The Associated Press. "They have not made a lot of friends."

Greece has relied on loans from European creditors and the International Monetary Fund since 2010.

It is in talks over the conditions for its next loan instalment, without which it could default as soon as next month. That has sent Greece's borrowing costs soaring.

Mr de Guindos says he hopes significant progress in the negotiations will occur before a European finance ministers meeting May 11.

"Time is running out," he said.

Mr de Guindos spoke on the sidelines of the semi-annual meetings of the IMF and World Bank in Washington DC.

He criticised Greek officials for previously raising the spectre of default, only to then reverse themselves.

Greek's Syriza Party was elected in January on a promise to end crippling austerity measures.

Yet in February it agreed with its lenders to propose a series of economic reforms in order to obtain a 7.2 billion-euro (£5.21 billion) loan.

Without thos e funds, it may not be able to pay the IMF about 1 billion euro(£0.74 billion) that it owes next month.

Yet Germany and other European nations have criticised Greece this week for failing to propose sufficiently broad economic reforms as a condition for the loan.

Mr de Guindos sounded a similar note yesterday. Greece's government needs to privatise state-owned companies, cut red tape and continue to reduce spending, he said.

"We are not discussing restructuring or forgiving the debt," he said. "We are discussing the kind of reforms to make the Greek economy efficient, competitive and growing again."

Greece's finance minister Yanis Varoufakis on Thursday denounced the sale of public companies by previous Greek governments as "disasters" because they were sold at "fire sale prices".

He said the government also opposes some other reforms that its creditors have demanded, including deep cuts to state pensions and legal changes that would make it easier for companies to fire workers.

Despite the ongoing disagreement, Mr de Guindos said the possibility of Greece leaving the euro was "off the table".

He said: "It could be extremely detrimental to everybody, especially Greece, but also extremely detrimental to the rest of Europe."

Separately, Mr de Guindos predicted Spain's economic recovery would accelerate this year. The nation's economy emerged from a crippling recession and grew 1.4% last year.

That growth rate will double this year, he predicted, and would lead to the creation of 600,000 jobs, up from 430,000 in 2014.

"Three years ago we were one of the main problems in the eurozone," he said, referring to the 19 nations that share the euro currency. "Now, we are leading the pack."

Still, he would not predict when unemployment would fall from its current sky-high level of almost 24% to below 20%. Spain will hold national elections later this year.

Press Association

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