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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 weeks. 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 emerged. “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 government.” 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 due. 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. _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
