Meeting in Brussels yesterday evening (May 23), EU heads of state and governments indirectly called on Greek voters to support the mainstream political parties in support of the EU/IMF bailout program as talk of a Greek exit from the euro zone continued to gather pace.
Greece has been a major issue of debate during the dinner summit, although the official agenda was focused on growth, sources told EurActiv. Panagiotis Pikrammenos, the caretaker Greek Prime Minister, told EU leaders that the results of May’s elections, which saw radical parties make strides, “reflect the agony and uncertainty of the Greek society.”
“The cost of adjustment has tested the limits of the Greek people and that is why we need urgent measures to restore confidence and growth,” Pikrammenos said.
Pikrammenos supported the proposal for boosting the funding of the European Investment Bank (EIB), adding that the Union’s lending institution, specialized in supporting development of economically weak regions, could play an important role in supporting SMEs in both Greece and the wider eurozone. He asked for the urgent release of €6.5 billion already been committed to Greece in order to allow paying the government’s bills.
A short statement by the European Council, called “Euro area press lines on Greece,” reaffirms the EU leaders’ wish to maintain Greece in the euro area, but only if it respects its commitment to implement the EU/IMF austerity program.
EU leaders also called on the next Greek government that will emerge from the June elections to “make the choice” to continue implementing the agreed reforms that will “bring Greece on a path toward growth and job creation.”
“The eurozone has shown considerable solidarity having already disbursed, together with the IMF (International Monetary Fund) nearly €150 billion in support of Greece since 2010,” the statement read.
Barroso reiterated strong desire to keep Greece in eurozone
European Commission President Jose Manuel Barroso on Wednesday reiterated the Commission΄s strong willingness to keep Greece in the euro area while urging the country to maintain its commitment to structural reforms.
“I reiterated the Commission΄s strong desire that Greece should remain a member of the euro area and that we will continue to do everything in our power for this to happen,” Barroso said in a statement after meeting with Greece΄s interim Prime Minister Panagiotis Pikrammenos.
Barroso stressed the Commission had made a commitment to maintain financial support for Greece as long as is necessary, assuming Greece maintains its commitment to implement the structural reforms that are essential for a return to growth.
“Without this solidarity, Greece will not be able to return to growth and prosperity. I therefore underlined the importance of Greece maintaining the commitments it has made,” he added ahead of an informal dinner of European Union (EU) leaders.
While acknowledging the “huge sacrifices” that the Greek people have made, Barroso expressed his wish that “there were an easier way out of the crisis Greece is facing.”
However, the President said the full implementation of the second program agreed by Greece and its international partners would be the “least difficult and the quickest way” for Greece to return to growth and job creation.
Luxembourg Prime Minister Jean-Claude Juncker denied reports that Eurozone finance minsters had been asked to prepare national contingency plans for a possible chaotic departure of Greece from the eurozone, following the June election. But his words indicated that all options remained open. “The working assumption” is that Greece would remain part of the euro, he told the press after the summit meeting.
French President François Hollande denied the report, saying he was “not aware of any simulation of a Greek exit from the euro” and that his country was “not working under that hypothesis.”
“What would happen if a new government formed after the Greek election refuses the memorandum and does not respect the goals? I think the euro zone’s attitude would be to ask it to strictly respect its commitments,” Hollande said.
But Belgian Foreign Minister Steven Vanackere appeared to de-dramatize the fact that countries were considering contingency plans.
“We must insist on efforts to avoid an exit scenario but that doesn’t mean we are not preparing for eventualities. I believe many countries have their contingency plans for the things they want to avoid at all cost, like terrorist attacks, and to say that we don’t have a contingency plan would be irresponsible,” Vanackere said.
In the meantime, the euro had a near 22-month low against the dollar and remained vulnerable to further declines as the prospect of a Greek exit from the euro zone kept investors on tenterhooks, Reuters reported.
(source: euractiv, Reuters)