Europe

Thursday, June 18, 2015 - 10:17

Update2: Ministers Express Mixed Views on Progress With Greece


--Adds comment from Greek official
--Dijsselbloem says gaps remain on both sides; talks on debt relief not for now
--France's Sapin says both sides closer than some might think
--Noonan says Ireland has taken advice from ECB on contingency measures

LUXEMBOURG(MNI) - Euro area finance ministers arrived in Luxembourg Thursday providing mixed reviews on how far both sides still have to go before a deal can be reached on how to close Greece's bailout programme.

Eurogroup President Jeroen Dijsselbloem said he wasn't hopeful of Greece coming forward with credible proposals at Thursday's Eurogroup meeting, though Greek Finance Minister Yiannis Varoufakis said he would be presenting his counterparts with his country's ideas on how to keep Greece as a member of the Eurozone.

Speaking to reporters upon arrival at the monthly Eurogroup meeting, Dijsselbloem said it is now up to Greece to come forward with a credible proposition on how it plans to close its bailout program. He also said that while Greece's partners remained open to listen to new proposals from Greece, any offer would have to add up and make sense economically.

"Too little progress has been made as you know," Dijsselbloem said, adding that there were "still some gaps" between what Greece and its international creditors are demanding.

Technical experts inside the European Commission, International Monetary Fund and European Central Bank have identified an additional E1.8 billion in further cuts that need to be made, ideally through pension reform. Greece has so far appeared staunchly resistant to such a demand.

Dijsselbloem said that the Eurogroup was still open to offering Greece flexibility in how this gap could be closed, but that everything must add up in order for a deal to be made.

"I have always said we would consider any alternative proposals," he said. But "we will not have a deal if it is not a credible deal."

He declined to say what he thought would happen if Greece fails to pay the International Monetary Fund E1.5 billion at the end of the month but that Europe "would have a serious situation" on its hands if Greece did not stand by its obligations to creditors.

Speaking later at a press conference, Dijsselbloem said that the Eurogroup's pledge at the end of 2012 to revisit the topic of debt relief for Greece still remained, but that doing so was conditional on Greece respecting its obligations inside the programme.

"The promise we made at the end of 2012 is still valid but it was conditional first of all that the Greek government would have to stick to all its commitments in the programme, which of course hasn't happened (and) which would require in other words a positive review of the whole programme. And we are nowhere near, we don't even agree what should be done to come to that review."

He said there were also questions on whether it was necessary from a debt sustainability perspective to implement further alleviation measures for Greece.

Also arriving in Luxembourg, Varoufakis made reference to remarks he said ECB President Mario Draghi has made in the past noting that a successful Eurozone depended on the inclusion of all its members.

"Today we are going to be presenting the Greek government's ideas along those lines. The purpose is to displace a costly discord with effective consensus," he said.

France's Finance Minister Michel Sapin said that outstanding differences between both sides were not as large as one might think and that it was essential both sides continued to come closer together.

"Our differences are not as large as that ... There is a real ability to converge. We should privilege this convergence through dialogue."

Slovakian Finance Minister Peter Kazimir said in his usual candidness that Greece had already wasted a lot of time and that any proposals offered by Varoufakis should rather be aimed at technical teams working in Brussels and not ministers working on a political level.

We need to be honest with Greece and ourselves because there is no time left for the games and we have to deliver and Greece has to face the reality. They might not like it even we might not like it but we cannot cheat the reality. When a bill is due certain things have to be done and we have to do it," Kazimir said.

"I do believe in miracles. I am Catholic so I believe in miracles," he added.

Ireland's Finance Minister Michael Noonan said that he had no expectations for a positive outcome from Thursday's meeting. He also noted that the authorities in Dublin had been in touch with experts at the ECB to discuss how best to prevent any spill over effects coming from a potential Greek exit from the Eurozone.

"I think that it will be discussed, but it will be a preliminary discussion to a longer political discussion of the heads of state and government," he said. "There's no optimism among the group of people that I've met already today."

Asked about the possibility of contagion in the euro area in the event of a Greek exit he said: "We don't think there will be a contagion effect if there was a Greek exit, but we've had conversations at a high level with the ... central bank and we are taking advise from the European Central Bank in Frankfurt and from elsewhere."

"But there is still time and there is still space for further discussion on a further set of proposals," he said.

According to a Greek official, who spoke on the condition of anonymity, Varoufakis will not be entering into specific policy proposals during the Eurogroup meeting, but would be speaking in more "general terms" about how Europe's institutions could provide financial shelter for Greece.

"He'll be speaking in much more general terms," the official said.

--MNI London Bureau;tel: +44 207-862-7499; email: smarks@mni-news.com

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