Troika revisits Greece amid talk of euro zone exit
INSPECTORS FROM the EU-International Monetary Fund -European Central Band troika return to Athens today in another effort to stabilise the second Greek bailout, a visit which comes amid renewed talk in Germany and beyond about the country leaving the euro zone.
At issue is the amount of new emergency loans required to help Greece balance the books in the light of delayed reforms and worsening recessions.
German and Greek reports suggest a sum of up to €50 billion may be required in addition to the agreed €130 billion, but European officials say the eventual figure may be nearer €20 billion.
Any increase will require yet more parliamentary votes in many euro zone countries, something certain to present fresh political difficulty in the autumn.
While the EU authorities are likely to fudge a €3 billion-plus bond redemption which falls due next month, the European Commission said yesterday that the next formal disbursement of aid to Greece will not be released before the end of the summer.
“The decision on the next disbursement will only be taken once the ongoing review is completed,” a commission spokesman said.
“In view of the Greek government’s declared commitment to undertake the steps necessary to bring the current adjustment programme back on track, the commission is confident that the decision on the next disbursement will be taken in the near future, though it is unlikely to happen before September.”
Whatever the final outcome of the troika review, the inspectors’ arrival is being played out against the backdrop of increasing frustration at Athens in the euro zone and beyond. Citing an anonymous European official, Germany’s Der Spiegel reported over the weekend that the IMF is refusing to make further transfers to the country.
Asked yesterday, the commission said it does not believe the IMF’s policy had changed and the IMF itself said it was supporting Greece in overcoming its economic difficulties. “An IMF mission will start discussions with the country’s authorities on July 24th on how to bring Greece’s economic programme, which is supported by IMF financial assistance, back on track,” the fund said.
Even so, officials in Brussels privately acknowledge a high degree of uncertainty over the current Greek plan and renewed doubt over its membership of the euro.
The official line in Berlin is that patience is required, but impatience is increasingly palpable behind the scenes.
Michael Meister, deputy parliamentary leader of Germany’s ruling Christian Democrats (CDU), said the Der Spiegel report “meant that the basis for further payments no longer exists, the money is not there”.
Government officials played down these remarks as out of step with the official Berlin line that, as a government spokesman said, the next troika report would allow leaders “to talk, in light of the facts, about obligations and the future path”.
Finance minister Wolfgang Schäuble took a firm line with Greece yesterday, hinting in public what is a growing belief in private: that Berlin’s belief in Greek miracles is all but spent.
Mr Schäuble said he was anxious “not to pre-empt” the troika’s report and that euro zone finance ministers would debate its contents before reaching any firm conclusion.
“If there have been delays,” he told the Bild tabloid, “Greece has to catch up”. Chancellor Angela Merkel is on holidays but, on her return, unnamed officials told the Süddeutsche Zeitung it was “unthinkable” she would go to the Bundestag a third time to ask for loans and guarantees for Greece.
The vote on the second Greek package last February saw a minor rebellion of backbenchers refusing to follow the government line.
Such sentiments were again aired in a vote last week on aid for Spain, and government MPs have made clear their frustration at having to justify continued Greek bailouts in their constituencies.
Deputy chancellor Philip Rösler, head of the liberal Free Democrats, used a weekend interview to float the idea of Greece concluding it would be better to withdraw from the euro zone.
Government politicians of all hues attacked Mr Rösler’s remarks as “unprofessional”, while Green Party parliamentary leader Jürgen Trittin called it “silly season” hysteria.