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02 July 2013

More reforms needed in Greece - German press roundup


The ECB and the German government are urging Greece to continue with its reform programmes, saying that solidarity is not a one-way street. The troika demands "tangible progress", otherwise the next tranche of the aid package might be at risk. Greece, however, seems to be speculating on another haircut.

Translated from the German

Greece, still in close to bankruptcy, is lagging behind with privatisation and reforms of the state sector. As the Handelsblatt reports, the troika of the European Central Bank (ECB), the IMF and the EU Commission has issued an ultimatum that Greece needed to show a clear commitment to the agreed reform programmes within the next few days, otherwise the transfer of the next loan tranche or aid money (€8.1 billion) could not be assured. Within the troika, the general dissatisfaction with the progress of the reform efforts, especially of the public sector, is rising. All agree that Greece had to deliver before the next meeting of the euro group on Monday.

Greek finance minister Hatzidakis told the Welt in response to the question whether a second haircut after the federal election in Germany in the autumn could be a symbol of solidarity and whether the government in Athens would hope for it in order to achieve the surplus structural budget set down in the terms of the troika: "If we are reliable and manage to surprise positively, I'm sure that our partners will show their solidarity with Greece".

German reactions to this were marked by some irritation, as the Welt reports: Only last week finance minister Wolfgang Schäuble had said that "we will not consider such a haircut". The European Central Bank (ECB) and the Federal Government are urging Greece to see through their reforms. In the same vein, Jörg Asmussen, Board Member of the European Central Bank, said that the recurring discussions about a haircut were not in the least helpful because they detracted from the necessary reform efforts in Greece.  Despite progress, there still remained a lot to do for the Greek government if it wanted to ensure that the progress review of the troika would be concluded positively. 

The Süddeutsche Zeitung reports that according to the Greek daily Kathimerini, Athens sent a progress report to the troika on Monday, in which it was said that not one of the troika's requirements for the payment of the next instalment of the rescue package had actually been met. 

In the Frankfurter Allgemeine Zeitung, German chancellor Angela Merkel also excluded the possibility of further debt restructuring for Greece. According to her, Athens had made considerable "progress, thanks to the very reform-orientated government" of prime minister Antonis Samaras. She told the Süddeutsche Zeitung that she expected Greece's debt sustainability to remain stable. 





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