Britain must “make up its mind” on the start of formal divorce procedures with the European Union as its economy stands to lose the most from the prolonged uncertainty, the head of euro zone finance ministers Jeroen Dijsselbloem said on Friday.
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As part of last year’s third bailout agreement, which is potentially worth up to 86 billion euros, Greece promised to meet a series of reforms to such things as pensions and labor markets, in return for the money that it needs to prevent going bankrupt and possibly exiting the euro currency. They include the long delayed launch of a massive privatisation fund and reforms in the highly sensitive energy sector. So far, Greece has only met two of those conditions, with the remainder at varying degrees of implementation. But the country is unlikely to be able to meet a September 15 deadline.
While work to enact the remaining requirements – such as asset sales and bank governance – for the latest payout is under way and the Greek government has time to qualify for the disbursement before it expires at the end of October, any persistent delays risk clouding the outlook for the next global review of Greece’s bailout progress and the prospects for debt relief being dangled by the creditors.
Greek Prime Minister Alexis Tsipras called for policies to foster growth as he prepared to host a summit of southern European states on Friday, saying they needed to have a bigger say in the future of Europe. “We all want it, there’s a political will”.
Slovak Finance Minister Peter Kazimir, whose country holds the rotating European Union presidency, had praise for Greece’s efforts to put its economic house in order but said Athens’ job is not done.
With French President Francois Hollande and Italian Prime Minister Matteo Renzi in attendance, the gathering comes less than two weeks after rescuers saved a one-day record of 6,500 migrants making the perilous journey across the Mediterranean to Europe.
He criticized German Finance Minister Wolfgang Schaeuble for backing an European Union waiver of fines against Spain and Portugal for failing to bring their budget deficits below the EU’s ceiling.
While Greece has made some progress in reshaping its economy, the bailout loans are saddling it with a huge amount of debt that many experts say it has no real prospect of repaying. Greece’s eurozone partners, notably Germany, have said outright debt reductions are not on the agenda but help could come in the form of lower interest payments or extensions to repayment dates.
Germany’s EU Commissioner Guenther Oettinger also expressed unease about the Athens meeting.
“The message must be heard”, he said.
Euro-area finance ministers sounded a familiar alarm bell about lagging Greek economic reforms, saying the nation still has much to do to qualify for its next aid payout.
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Kazimir projected optimism nonetheless, declaring “the future is bright”.
