German Chancellor Angela Merkel, the eurozone's main paymaster, said on Friday Greece would only receive fresh funds to ease a cash crunch once its creditors approve a comprehensive list of reforms it has promised to present soon. However, she signalled some flexibility on what reforms Athens would have to make, and European Commission President Jean-Claude Juncker offered leftist Greek Prime Minister Alexis Tsipras a sweetener by saying 2 billion euros from the European Union budget were available to ease the humanitarian impact of five years of austerity measures. Both leaders were speaking after Tsipras promised eurozone leaders in overnight talks on the sidelines of an EU summit that his government would move swiftly to present a full economic reform package in a drive to avert bankruptcy.
After two months of growing frustration on both sides since Tsipras was elected with a mandate to end austerity, he held three hours of talks with the leaders of Germany, France and the main EU institutions to try to break an impasse that risks sending Athens stumbling out of the eurozone.
A joint statement by the EU institutions spoke of a "spirit of mutual trust" and Tsipras said he now felt more optimistic, but it remained uncertain whether he and Merkel were talking about the same reforms, and how far Greece would have to start implementing them before it receives any new cash.
The risk of a continued standoff, exactly a month after Greece secured a last-gasp four-month extension of an EU/IMF bailout, was highlighted by comments from Merkel and Tsipras. "The agreement of Feb. 20 is still valid in its entirety. Every paragraph of the agreement counts," Merkel told German journalists who questioned whether she was now offering cash for promises.
Tsipras appeared to differ. "It is clear that Greece is not obliged to implement recessionary measures," he told reporters. "Greece will submit its own structural reforms, which it will implement." Merkel, facing strengthening resistance at home to continued lending to keep an erratic partner in the euro, insisted that only the completion of approved measures would satisfy the creditors, including the Eurogroup of eurozone finance ministers. "The Greek government has the possibility of replacing individual reforms outstanding from Dec. 10 with other reforms, if these ... have the same effect. The institutions and then the Eurogroup must decide whether they do have the same effect," she said, noting that Ireland had made such changes with EU backing.
No deadline for list
Tsipras told a news conference he and Merkel had agreed to forget the previous Greek government's commitments, notably on the level of a primary budget surplus, which excludes debt payments, expected this year. He said he had no deadline for submitting the comprehensive list of reforms and insisted Greece faced no short-term liquidity problem, contradicting comments by EU officials that Athens could run out of money in mid-April. Tsipras will make a much anticipated first official visit Berlin on Monday. Asked whether Greek demands for reparations for the World War Two Nazi occupation would be on the agenda, Merkel said Berlin had addressed the issue in the past but she was keen to discuss bilateral German assistance programmes. EU officials said that if Greece came up with a convincing plan, the Eurogroup could meet as early as next week to release at least some funds. Merkel too said Greece could get some payment sooner if it fulfilled the requirements faster.
Greece is pressing in particular to receive 1.9 billion euros in profits that the European Central Bank made last year on its holdings of Greek government bonds. The Greek Finance Ministry said it would respond in a "constructive spirit" to a list of requirements on reforms being drawn up by a team of technical experts from the creditors - a contrast to an atmosphere of mutual mistrust which marked encounters with EU officials in Athens this week. Finance Minister Yanis Varoufakis, whose comments and behaviour have offended many of Greece's partners, especially Germany, joined the call for immediate implementation of the Feb. 20 extension agreement. "First, we should work towards ending the toxic ‘blame game' and the moralising finger-pointing which benefit only the enemies of Europe," he said in a blog post on Friday.
