Tuesday, 9 June 2015

EU Frustration Mounts as Greece Lashes Out at Creditor Demands

In World Economy News 09/06/2015

The European Union’s frustration with Greece is mounting.
German Chancellor Angela Merkel demanded urgent action from the Greek government on Monday after U.S. President Barack Obama voiced his concerns about the standoff over financial aid at a summit of Group of Seven leaders. European Commission President Jean-Claude Juncker said Greece is not doing enough to ensure it can stay in the euro.
Creditors are growing increasingly exasperated with Greek Prime Minister Alexis Tsipras’s negotiating tactics after he rejected the terms of an aid package again last week. Tsipras’s government then used a technicality to postpone a payment of about 300 million euros ($336 million) to the International Monetary Fund.
Juncker said the Greek leader had misrepresented the creditors’ position in last week’s talks in a speech to his lawmakers and wasn’t doing enough to overcome differences with the euro area.
“I am still waiting for the Greek part of the bridge,” Juncker said in an interview with Bayerischer Rundfunk after a two-day meeting of G-7 leaders at Schloss Elmau in southern Germany. “One can’t endlessly lengthen the EU or Eurogroup part of the bridge.”
In response to those entreaties, Greek Finance Minister Yanis Varoufakis questioned the good faith of his country’s creditors.

German Divisions
Varoufakis said in Berlin late Monday that aid could be released overnight if euro-area officials took the negotiations seriously.

“We need to avert an accident that won’t be an accident,” he said at an event that followed a meeting German Finance Minister Wolfgang Schaeuble. “We have a historic duty not to allow this to happen.”
Schaeuble is willing to let Greece exit the euro if Tsipras refuses to take measures to fix up the economy and lower the country’s debts, according to people familiar with the matter. That’s opened a divide with Merkel, who is ready to make concessions to keep Greece in the euro because of geopolitical concerns.
“All of us who were at the table want Greece to stay in the euro area,” Merkel said after hosting the summit of G-7 leaders also attended by Juncker and International Monetary Fund chief Christine Lagarde. “Let there be no doubt about what we always say — that making an effort of your own and receiving solidarity is the right combination and two sides of the same coin.”
The Greek stock market fell 2.7 percent on Monday to reach its lowest level since April. The Athens stock market’s benchmark index has lost 26 percent in the past six months. Greece’s 10-year bond yields rose for a third day to 11.3 percent.
‘Being Serious’
Greek Minister of State Nikos Pappas and Deputy Foreign Minister Euclid Tsakalotos met EU Economic Affairs Commissioner Pierre Moscovici in Brussels on Monday, a Greek government official said.

The officials discussed the progress in negotiations with particular emphasis on Greece’s budget shortfall through the end of next year, the official said. The Greek ministers will continue their talks in Brussels on Tuesday.
A solution to the negotiations could be reached before June 14 but further high-level meetings will only happen if there is a chance of a deal, a French government official told reporters on the condition of anonymity. Tsipras himself will travel to Brussels on Wednesday for an EU summit with South American leaders which Merkel and French President Francois Hollande will also attend.
“A faster resolution is in Greece’s interest,” Hollande told reporters in Schloss Elmau. “If we want to move forward, it would be necessary to have technical talks, in the hours and the days to come, so that the proposals that aren’t working for the Greeks are replaced by alternative proposals.”
As the Greek government railed against the demands of its creditors, Obama urged Tsipras to knuckle down and take the measures required to release aid.
“What it’s going to require is Greece being serious about making some important reforms, not only to satisfy creditors but, more importantly, to create a platform whereby the Greek economy can start growing again and prosper,” Obama said.

Source: Bloomberg