[Marxism] EU frustration over Greece boils over at eurogroup meeting

Dayne Goodwin daynegoodwin at gmail.com
Fri Apr 24 23:56:30 MDT 2015

EU frustration over Greece boils over at eurogroup meeting
by Peter Spiegel in Riga
Financial Times, April 24 (full text)

Months of mounting tensions between Greece and its creditors boiled
over at a high-level EU meeting on Friday with eurozone finance
ministers angrily accusing their Greek counterpart of backtracking on
commitments and failing to grasp the deep differences that still
divide them.

Athens is running desperately short of cash and many eurozone
officials fear that, without an agreement to release some of the
remaining €7.2bn in its bailout programme, the government could
default as early as mid-May.

Eurozone officials briefed on the closed-door, three-hour meeting said
Yanis Varoufakis, the Greek finance minister, specifically warned that
cash was so tight that government coffers might run dry in a matter of

The antagonism between Mr Varoufakis and other ministers became so
severe during the eurogroup session that Slovenia’s finance minister
suggested if bailout talks did not progress more quickly the eurozone
should prepare a “Plan B” to deal with a Greek default.

According to three eurozone officials, other ministers from smaller,
vulnerable economies expressed similar sentiments. The comments
prompted a sharp rebuke from Mr Varoufakis, who accused his Slovenian
counterpart of being “undignified” for raising the scenario and
suggested the remarks were “profoundly anti-European”.

The sharp exchange came at a meeting originally intended to agree on a
new list of Greek reforms that Athens could implement to gain access
to the funds left from its €172bn bailout. But Jeroen Dijsselbloem,
the Dutch minister who chairs the eurogroup, said “significantly more
progress” was needed and warned “time is running out”.

The contentious session undermined claims by Greek officials that a
Thursday meeting in Brussels between Alexis Tsipras, the Greek prime
minister, and Angela Merkel, his German counterpart, had narrowed the
differences. The claims briefly sent the euro rallying in morning
trading, but those gains evaporated after news of the differences

“This game of chicken is turning into Angry Birds,” said one official
from a eurozone country.

Mr Dijsselbloem said the stand-off had reached a point that the
negotiating process needed to be overhauled. Officials briefed on the
private talks said Mr Dijsselbloem specifically requested a return to
more in-depth evaluations by Athens-based bailout monitors — something
staunchly resisted by the new Greek government.

“Too much time has been lost in the past two months,” Mr Dijsselbloem
said at a press conference. “There are tight timelines, as we all
know. Liquidity is becoming more and more a problem for the Greek

While Mr Varoufakis said the government was “utterly undogmatic” about
how to speed up talks, he made clear a return to intrusive inspections
by the so-called “troika”, as the bailout monitors were formerly
known, was unacceptable.

“The notion that everything would be resolved more quickly if we went
back to the troika visits of yesteryear ... from our perspective is
simply groundless,” he said.

Greek officials have expressed hope that a portion of the €7.2bn in
aid could be quickly disbursed to meet immediate needs, or that the
current talks could be merged into a larger, third bailout. This could
take Athens through the summer, when the largest debt payments come

But Mr Dijsselbloem ruled out both possibilities, saying that if the
parties could not address the differences at hand, other issues could
not be broached. “It’s very hard to talk about the future if you
cannot agree on a period of four months,” he said.

Meanwhile, Mario Draghi, the European Central Bank president,
suggested his governing council might need to review the value
assigned to Greek bonds when they are used by Greek banks as
collateral to receive emergency central bank loans, the only cash
keeping some of them functioning.

In recent days, borrowing costs on Greek three-year bonds have touched
levels not seen since the height of the eurozone crisis in mid-2012.
This week, they reached 29.6 per cent before falling, but by late
Friday were still at 25.9 per cent.

Mr Draghi said emergency loans would continue as long as Greek banks
were viewed as “solvent and have adequate collateral”. But his remarks
indicated the loans could become more costly as bond yields continued
to rise.

Officials briefed on the talks said some of the most testy exchanges
came over how much progress had been made in negotiations to release
the funds. Mr Varoufakis in his opening remarks told his counterparts
that he believed a deal could be reached quickly, suggesting a
conference call could be held soon to agree an aid disbursement.

But other ministers expressed incredulity at the claims, with some
suggesting a deal might not be achieved before the bailout expires in
June. Mr Dijsselbloem suggested next month’s meeting of finance
ministers, scheduled for May 11, would only “take stock” of the
situation rather than serve as a chance to reach a deal.

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