Eurozone finance chief Jean-Claude Juncker said Wednesday that further decisions on Greece would be taken only after the troika of international creditors, namely the International Monetary Fund, European Union and the European Central bank, release their next report on Greece.
Speaking to reporters in Athens after talks with Greek Prime Minister Antonis Samaras, Junker said the final decision on a Greek request seeking more time to implement the reforms and spending cuts requisitioned by international creditors would depend on the troika's report due next month.
"I have to underline this will depend on the findings of the troika mission and we have to discuss the length of the period and other dimensions," added Juncker in the joint news conference with Samaras in Athens.
Representatives of the so-called troika of creditors are due to visit Athens in September to assess if Greece has fulfilled earlier agreed bailout requirements for receiving the next installment of 31.5 billion euros. The troika's consent is required at each stage to obtain further bailout funding.
Greece has pledged a series of economic reforms and spending cuts worth 11.5 billion euros for 2013 and 2014 to keep the bailout-deal afloat. But Athens is seeking an extension of up to two years to implement those painful cuts.
Speaking at the joint news conference with Samaras, Junker, who is also the Prime Minister of Luxemburg, said he was "totally opposed" to a Greek exit from the eurozone as it would have "dangerous" consequences for all concerned parties. "As far as the immediate future is concerned, the ball is in the Greek court. In fact this is the last chance and Greek citizens need to know this," he added.
Earlier on Wednesday, Samaras told German daily Bild ahead of his crucial meeting with Junker that Greece needs more time to implement the reforms and spending cuts demanded by the bailout deals. He said Greece needs room to breathe, to keep the economy afloat and to boost government's revenue, stressing that time does not automatically mean more money.
"Let me be very clear. We are not asking for additional money," Samaras said, adding that the government is looking to stimulate growth and reduce the financial gap. "We will stand by our commitments and fulfill all the requirements" of the bailout program, he said.
Samaras said the consequences of returning to drachma would be disastrous for his country. It would extend the recession by another five years and push up unemployment above 40 percent. Shunning the euro could stir social unrest and democracy will face unprecedented crisis, he warned.
Greece had agreed in March to implement further austerity programs demanded in exchange for a joint 130 billion euros bailout from the EU, the ECB and the IMF. In addition, the country had earlier availed a joint EU-IMF 110-billion-euro rescue loan in May 2010, of which several tranches have been handed out to Athens.
In return for the two loans, Greece had agreed to implement painful and hugely unpopular austerity measures, including spending cut, slashing public sector jobs, pension reforms, privatization of loss-making state-owned companies as well as increasing existing taxes and imposing new ones. However, Greece has repeatedly fallen short of its reform pledges, triggering concerns among other eurozone member-states.
In addition to his meeting with Junker in Athens on Wednesday, Samaras is slated to have talks with French President Francois Hollande and German Chancellor Angela Merkel later this week. During those meeting, Samaras is expected to seek a two-year extension for the country's fiscal adjustment program.
German Foreign Minister Guido Westerwelle stressed Monday his country wants Greece to continue implementing reforms and tough cost-cutting measures it had earlier agreed while availing the two massive international bailout loans to avoid bankruptcy. He said "a substantial softening of the agreements and the agreed reforms is not possible from the German government's point of view."
by RTT Staff Writer
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