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 Greece has been kept from bankruptcy by two international bailouts
but now risks running out of money within weeks if it does not
receive more funds. Greek banks reported the largest deposit
withdrawals since Feb. 20, a sign savers are worried about the
outlook for the country's finances and institutions.
Prime Minister Alexis Tsipras has requested a meeting with the
leaders of Germany, France and the main EU institutions on the
sidelines of a European Union summit to press for Athens to receive
short-term funds to keep itself afloat.
"I will repeat to him what I’ve already told him twice: Greece must
undertake the necessary reforms, Greece must ensure that the
commitments it made to the Eurogroup in 2012 and more recently are
followed up on," European Commission President Jean-Claude Juncker
told France's Europe 1 radio.
German Chancellor Angela Merkel delivered the same message in a
speech to parliament ahead of the late-night Brussels talks and a
crucial visit by Tsipras to Berlin next Monday, saying the crisis
could only be overcome if Greece stuck to agreements.
No one should expect a solution from Thursday's session or her
meeting with Tsipras next week, which offered "time to talk to each
other in detail and perhaps also to argue", she said.
A political meeting of a small group of leaders could not be used to
circumvent the formal agreement Greece concluded on Feb. 20 with
Eurogroup finance ministers, she told the lawmakers.
"There remains a very tough way ahead," Merkel said. Greece must
understand that international aid brought with it an obligation "to
reform its budget and work towards one day no longer needing help".
Juncker has been trying to build bridges between Tsipras and
Greece's creditors. His tone of exasperation suggested even Athens'
friends are angry at his government's mixture of belligerent
rhetoric and procrastination.
Two EU/International Monetary Fund bailouts totaling 240 billion
euros have kept Greece from bankruptcy since 2010 but its economy
has shrunk by 25 percent, partly due to austerity measures imposed
by the lenders. It risks running out of cash without more aid or
permission to issue more short-term debt.
EU sources said Greece had refused to provide any update on public
finances or reform plans in a conference call of senior euro zone
officials on Tuesday and had denied EU, IMF and European Central
Bank experts access to government buildings in Athens, insisting all
meetings take place in a hotel.
The discussions had not gone beyond procedural issues of who would
be allowed to talk to whom, the sources said.
Asked whether the experts had been kicked out, an EU official said:
"The talks in Athens were paused yesterday. This is normal procedure
and can be helpful to take stock. There is willingness to talk but
the Greeks must deliver."
"LIQUIDITY PROBLEM"
Deputy Prime Minister Yannis Dragasakis, in a television talk show
early on Thursday, accused the creditors' team of exceeding their
authority.
"The technical teams came to collect facts, but they then requested
things which went beyond their jurisdiction. For example, they
wanted to review the government as a whole, every ministry's program
and the reforms," he told Alpha TV.
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Dragasakis acknowledged Greece faced a liquidity problem and needed
the cooperation of its European lenders to keep paying salaries,
pensions and debt repayments.
"We haven't received any (bailout) tranches since August 2014 but we
have been meeting all of our obligations," he said. "This has its
limits.
The ECB agreed late on Wednesday to raise the limit on emergency
lending to Greek banks by 400 million euros to 69.8 billion, banking
sources said. Bankers said savers withdrew about 300 million euros
in deposits on Wednesday.
European Parliament President Martin Schulz said Greece's financial
situation was "dangerous" and it needed two to three billion euros
in the short term to avoid bankruptcy.
"Time is short," Schulz told Deutschlandfunk radio. "So it would be
good if Greece fulfils the obligations that it has agreed to - then
further money will flow."
Greece has asked to receive some 1.9 billion euros in ECB profits on
Greek bond holdings, which finance ministers have linked to progress
in implementing the program. It also wants ECB permission to issue
more short-term treasury bills, which only Greek banks are willing
to buy.
Tsipras' Syriza party won a general election in January on a
platform of scrapping the bailouts, ending austerity and refusing to
cooperate with the "troika" of institutions supervising its bailout
program.
The prime minister lambasted EU "technocrats" on Wednesday for
demanding prior consultations on the cost of a "humanitarian bill"
adopted by parliament to provide food stamps and free electricity to
the poorest Greeks worst hit by austerity.
Athens has made no move in the month since the Brussels agreement to
bring forward legislation to meet its commitments under the bailout
agreement.
The chairman of the Eurogroup of finance ministers, Jeroen
Dijsselbloem of the Netherlands, hinted this week that Greece might
have to introduce capital controls restricting cash withdrawals, as
Cyprus had done, if financial stress got worse.
German Finance Minister Wolfgang Schaeuble has warned that the risk
of an accidental Greek exit from the euro zone is rising, while
insisting that Berlin wants to avoid that.
(Additional reporting by Mark John in Paris, Karolina Tagaris,
George Georgiopoulos and Angeliki Koutantou in Athens, Stephen
Brown, Michelle Martin and Madeline Chambers in Berlin, Jan
Strupczewski in Brussels; Writing by Paul Taylor; editing by Anna
Willard)
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