Galery

1

The Troika is exercising pressure on Greece for the rapid implementation of structural reforms while talks with the government to address the issue of granting the sixth tranche of the loan have still not been concluded. 

In statements for the German newspaper “Welt am Sonntag”, published on Sunday, representatives of the Troika, Poul Thomsen and Matthias Mors, warned that the measures from the plan to support Greece may fail if Athens does not apply more stringent structural reforms. 

"Greece stands at a crossroad. It is clear that the rescue program will fail if the government does not follow the path of much more stringent structural reforms than those we have seen until now ", says Thomsen, a representative of the International Monetary Fund in the Troika. "This is two steps forward and one step back," he adds. "The Greek government understands that many of the most difficult changes are still to come. At the same time there is an increasing political and social fatigue ", says the Danish senior official from the International Monetary Fund. 

Thomsen's colleague from the Troika, the representative of the European Commission, German Matthias Mors criticized the slow pace of implementing the reforms: "The Greeks thought it was enough to draw up laws. Their application, however, takes time. And often the necessary structures are missing." 

In this atmosphere, the Greek Finance Minister Evangelos Venizelos met once again with the heads of the Troika mission on Saturday night. 

According to the Ministry of Finance, the consideration of the memorandum has been completed, with the exception of a few points and today discussions will continue about the implementation of the medium-term fiscal strategy for the period 2013-2014.

The discussion on more debt forgiveness continues

At the same time debates continue on the possible "cutting" of the Greek debt. German Finance Minister Wolfgang Schäuble returns to this question in an interview for the Sunday issue of “Frankfurter Allgemeinen Sonntagszeitung”. As he notes, the percentage of reduction of the Greek debt, 21 percent, which was agreed upon at the summit on July 21, may not be sufficient. "Maybe in July we set a very small percentage" for the reduction of the Greek debt, he said, adding that he was waiting for the Troika's report at the end of the month for the final decision on the issue. Schäuble also warned that "there is an increased danger of the crisis deepening and spreading." 

With the decision of the European summit on July 21 private creditors were asked to contribute to the second rescue plan for Greece. Banks were urged to exchange their bonds in the Greek debt for new bonds over a longer period, reducing their value by 21 percent. Greater “cutting” would compel them to undertake the new depreciation in their accounts.

In this context, Europeans plan to provide for the recapitalization of banks. 

This issue has affected Mr. Schäuble: "We have to make sure banks have enough capital" to avoid their own "contamination". 

The Head of Investment Fund PIMCO Mohamed El Erian noted in an interview for the Sunday issue of “Kathimerini” newspaper that Greek debt is not viable and needs immediate remission, perhaps even more than 50 percent. He believes that it is a "credit event" with significant consequences in the short term for the country, but stresses that "the more it is delayed, the more the situation of the Greek economy will worsen." 

For his part, the Vice-Chairman of the parliamentary group of Angela Merkel's party (CDU) Michael Fuchs, in an interview for "Real news" newspaper stated that "we cannot agree with one cut of the debt without rules and conditions because Greece must give something in return, such as part of its national sovereignty, at least temporarily." 

The German MP also claimed that the Greek debt is not viable, noting that "someone will have to control you, to avoid creating similar problems in future." He stresses that it is not a decision that will be taken by Germany but by the Troika. Michael Fuchs also notes that it is not provided for Greece to withdraw from the euro [EUR = X], but stated that he personally is not convinced that staying in the eurozone will be the best long term solution for Greece, for it to become competitive and regain prosperity. 

Merkel: Foreign intervention for countries-offenders

Meanwhile, as reported by "Dow Jones Newswire", German Chancellor Angela Merkel in a speech to the Congress of Christian-social Union (CSU), the conservative government partners of Merkel, said that countries that repeatedly violate the rules of the Stability Pact should accept the likelihood of interference in their national budgets. She also said that the decision of the previous German government for Greece to enter the eurozone was not compatible with the Stability Pact and development of the eurozone. 

Conservative government partners of the Chancellor from southern Germany criticized Greece for having "stolen" on its road to joining the eurozone, and failing to elect a known eurosceptic for deputy leader of the party. On the contrary, they chose to hold a minister loyal to Merkel’s government as one of four deputy leaders. Thus rejecting a "revolutionary" who has repeatedly criticized the rescue plans for the over-indebted eurozone countries in an attempt to become the defender of disappointed Germans.