comscore Greece, European creditors divided ahead of new debt talks | Honolulu Star-Advertiser
Business | Top News

Greece, European creditors divided ahead of new debt talks


BRUSSELS >> Greece and its European creditors on Friday sought to bridge major differences over Athens’ request for a six-month loan extension that might keep it from falling out of the euro.

Facing the Greek request was the insistence by several eurozone nations, led by Germany, that there would be no escaping the painful reforms, spending cuts and tax increases long demanded of Athens in exchange for the loans.

Friday’s meeting was the third among finance ministers from the 19-nation eurozone in just over a week as Greece’s European bailout program is due to expire on Feb. 28.

If no deal is reached by then, the country faces the risk of bankruptcy and an eventual exit from the single currency union — a move that neither side wants as it would create huge uncertainty for the country and region.

Friday’s emergency meeting was called to respond to the left-wing Greek government’s demand for more time to finalize its current bailout program and negotiate new arrangements with its partners that will be less onerous on Greek citizens.

A deal at the talks is far from certain.

The proposal did not promise to continue all of the budget cuts and reforms that the eurozone has been adamant it should stick to. Germany, the most influential creditor, has claimed Greece’s latest proposal is a “Trojan horse” to help the government dodge its commitments.

Greek Prime Minister Alexis Tsipras swept to power last month on a pledge to ease the budget belt-tightening and reorganize the 240 billion euro ($272 billion) bailout debt.

So far, the government has sometimes sent out mixed messages which did not go down well with the other eurozone nations and European Union institutions.

“The Greeks have acted like elephants in a China shop,” German EU Commissioner Guenther Oettinger told Deutschlandfunk Friday. “Now they slowly realize what the real numbers are. But they have already done quite a bit to sap the confidence of their European partners.”

The EU Commission distanced itself from Oettinger’s remarks, saying that he spoke in a personal capacity.

The Greek government has faced the unpalatable prospect of reneging on its election promises to ease the austerity measures weighing so heavily on Greek citizens, or possibly leaving the group of countries using the euro single currency.

In the short term, if no solution is found, Greece could be left to handle its debts alone from next month.

Late Thursday, Tsipras held telephone conversations with French President Francois Hollande and German Chancellor Angela Merkel after Germany sharply criticized the Greek compromise offer.

Germany argues that Greece has failed to provide detailed alternatives to cost-cutting reforms imposed by the previous government that helped the country balance its budget after decades of excessive borrowing.

“There are a lot of questions that have to be cleared up,” German Finance Ministry spokeswoman Marianne Kothe said Friday. “And the problem is not so much what is in the application as what is not in there.”

The Netherlands also wants more light shed on Greece’s request.

“We will ask the Greeks for clarification,” Dutch Secretary of State for Finance Eric Wiebes said as he arrived at EU headquarters. “This session should show whether indeed the Greeks are willing to meet all conditions. And if that is so, then for sure we can discuss an extension.”

The Commission was slightly more upbeat than Oettinger but remained cautious, with spokesman Margaritis Schinas saying a deal could be found “if everyone is reasonable, but we are not there yet. We expect further work will be needed.”

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Be the first to know
Get web push notifications from Star-Advertiser when the next breaking story happens — it's FREE! You just need a supported web browser.
Subscribe for this feature
Comments have been disabled for this story...

Scroll Up