Europe

Greece crisis: Europe anger at 'amateurish' Greeks

Alexis Tsipras with Jean-Claude Juncker (11 June) Image copyright AFP
Image caption Mr Tsipras has been personally involved in talks with EU leaders in recent weeks

EU officials and German politicians have vented their frustration at Greece, with time running out for reaching a debt deal.

One diplomat described as amateurish Greece's attempts to unlock bailout funds from the EU and IMF.

Greek Prime Minister Alexis Tsipras said it was up to international creditors to "turn to realism".

But Germany's European Commissioner said if talks failed Greece would come under a state of emergency.

Without a cash-for-reforms debt deal with the EU and IMF, Greece is expected to default on a €1.5bn (£1.1bn; $1.7bn) debt repayment to the IMF due by the end of the month.

The Athens government's bailout deal with the EU also runs out on 30 June and Mr Tsipras has been trying to unlock the final €7.2bn instalment.

European Commissioner Guenther Oettinger, who is also a member of German Chancellor Angela Merkel's centre-right CDU, said that on 1 July Greece would have to be considered an "emergency area", affecting police salaries, medicines, energy and other fields.

Image copyright Reuters
Image caption Greece is at risk of defaulting on a major repayment to the IMF at the end of June

CDU figures in Germany lined up to criticise Greece's position, with deputy party leader Volker Bouffier condemning Greek demands as unrealistic and Julia Kloeckner from the party executive accusing Mr Tsipras of overplaying his hand.

Even the head of the centre-left Social Democrats (SPD) in Germany's coalition, Sigmar Gabriel, who has been seen as more sympathetic to the Greek position, warned the Athens government that time was running out. "Everywhere in Europe, the sentiment is growing that enough is enough," he wrote in Bild newspaper.

One European Union official said the clock was already at five-past-midnight, and although eurozone finance ministers were poised for last-ditch talks on Thursday, "at this stage there's nothing to discuss".

European Central Bank President Mario Draghi said emergency credit would continue to be provided for Greek banks as long as they were "solvent and have sufficient collateral", but he refused to say what might happen if Greece missed any debt repayments.


What next for Greece?

Image copyright AFP

Timeline

  • 17 June: ECB expected to reassess continuing support for Greek banks in case of default
  • 18 June: Eurozone ministers meet - seen as last chance to reach deal that Greece can ratify by end of June
  • 30 June: Eurozone bailout with Greece runs out + deadline for Greek €1.5bn debt repayment to IMF

How close is Greece to Grexit?

Greece special report


Speaking to Greek newspaper Efimerida ton Syntakton, Mr Tsipras warned that "further cuts to pensions after five years of looting under the bailouts can only be viewed as serving political expediency".

"We will patiently wait until creditors turn to realism. We have no right to bury the European democracy in the land where it was born."

But European Commission spokeswoman Annika Breidthardt rejected his assertion that creditors were seeking pension or wages cuts. They only wanted Athens to phase out early retirement and remove "incorrect incentives for early retirement".

Greece had already agreed to specific targets for its primary surplus, she said, with 1% of GDP this year, followed by 2% in 2016 and 3.5% by 2018.

What was important was agreeing how to achieve that.

She said a deal had been reached on changes to VAT rates, with a standard rate of 23%, a second reduced rate of 13% and another "super reduced" rate of 6% on books and medicines.

However, while creditors were expecting annual savings of 1% of GDP in pensions and VAT, Greece later presented calculations that indicated far smaller reductions. As much as €1.8bn had been expected in pension savings, but Greece came up with only €71m, the spokeswoman said.


Germany loses patience - by Jenny Hill, BBC News Berlin

Image copyright AP
Image caption Sigmar Gabriel (L) has in the past been seen as sympathetic to Greece

"The Greek government is playing with fire," said Vice-Chancellor Sigmar Gabriel, warning time and patience were running out. The prevailing mood is one of irritation as the need to find a solution grows more urgent.

Greek Finance Minister Yannis Varoufakis, in an interview with tabloid newspaper Bild, ruled out a Grexit but took the opportunity to reiterate demands for Greek debt to be restructured and for emergency talks led by Angela Merkel.

Perhaps that's no surprise. The chancellor has made it clear she wants to keep Greece in the eurozone. But she has reportedly acknowledged the possibility of a Grexit and is under pressure domestically on Greece. One conservative colleague, Wolfgang Bosbach, has threatened to resign rather than support another bailout deal.


Greece in numbers

€320bn

Greece's debt mountain

€240bn

European bailout

  • 177% country's debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate

Reuters

Pension wrangle

IMF chief economist Olivier Blanchard, in a blog post, explained that Greece needed to reduce pension expenditure - which already accounted for more than 16% of GDP - by 1% of GDP. He also argued it could be done while protecting the poorest pensioners.

As pressure on Greece intensified, shares in Greece tumbled, with some bank stocks falling by more than 10%.

In a further sign of widespread German frustration, the head of the influential IFO Institute for Economic Research, Hans-Werner Sinn, said he believed the Berlin government should refuse further funding for the Greek economy.

A leading MP in Mr Tsipras's left-wing Syriza party, deputy speaker Alexis Mitropoulos, said if talks failed the prime minister would have to consider either a referendum or fresh elections.

Mr Tsipras's Syriza-led coalition swept to power in late January, with an anti-austerity mandate.