EU finance ministers are pushing Greece to press ahead with reforms so it can receive 2.8 billion euros bailout cash from the EU and International Monetary Fund by the end of October.
EU finance ministers have been discussing whether to withhold bailout money from Greece amid signs Athens is falling short on its commitments to reform the economy.
Meeting in Bratislava, the ministers in what is known as the Eurogroup pushed Greece to press ahead with reforms so it can receive 2.8 billion euros from the EU and International Monetary Fund by the end of October.
Eurogroup head Jeroen Dijsselbloem told reporters: “Summer is over. We really need to restart and pick up on the time lost. And the Greek minister, our Greek colleague, was I think convinced there was a joint interest for all of us to keep this on track. It has very much to do with trust, trust of course between us, trust in the IMF… but also trust from the outside world in Greece and the Greek economy.”
— Jeroen Dijsselbloem (@J_Dijsselbloem) September 9, 2016
J_Dijsselbloem</a> after <a href="https://twitter.com/hashtag/Eurogroup?src=hash">#Eurogroup</a> meeting today <a href="https://t.co/VGDJBp7aah">https://t.co/VGDJBp7aah</a></p>— EU Council Press (EUCouncilPress) September 9, 2016
The EU’s Economic Affairs Commissioner Pierre Moscovici said he would have liked Greece to have made more progress on reforms by now, adding: “We have to tell them clearly that they need to stick to their commitments. We must be really demanding, but at the same time let’s not dramatise. We are still in capacity to reach this agreement. We all want it, there is a political will, there is a capacity.
Spain and Portugal budget deficits
The ministers also said Spain and Portugal must still tackle their excessive budget deficits, even though they were not fined in July for breaking EU limits.
France also escaped punishment for similar transgressions last year, raising doubts as to whether EU budget rules can ever be enforced.
Indeed with populist and euro sceptic movements gaining support across Europe and elections in Germany, France, the Netherlands and a referendum in Italy all scheduled for the next 12 months, some officials would like to see the rules relaxed further, rather than enforced more strictly.
In the face of mediocre economic growth some ministers share that view. “At a time when we have weak growth one should not throttle that growth through economic sanctions,” Austrian Finance Minister Joerg Schelling said.
“Make your mind up”
Dijsselbloem also said 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.
EU leaders have pressed Britain to initiate formal exit talks as soon as possible after voters chose to split from the bloc in a referendum in June, although the government plans to take until at least the end of the year to form a negotiating stance.
“For the Brexit process, it really is up to the British to make up their minds, in terms of when to start and how to get it on the road,” Dijsselbloem told reporters in Bratislava before a meeting of the Eurogroup countries using the euro currency.
“I think, in the end, it will be the British economy that is damaged most, which I don’t hope for but, I mean, this is my concern.”
He also said he felt there was a strong political commitment from the EU’s remaining 27 members to move forward together.
Other ministers said the so-called Brexit would be part of talks that should focus on improving the EU.
“We will talk of course … informally, but all the more intensively, about how to strengthen Europe after the British decision,” German Finance Minister Wolfgang Schaeuble said, mentioning higher investment and stronger tax regulation as areas of discussion.
Sweden’s finance minister, Magdalena Andersson, said Brexit should not be allowed to dominate talks.
“We, of course, need a good Brexit both for Britain and the European Union,” she said. “But also within the European Union we need to take steps forward to develop the union and not only be hijacked by Brexit.”