Date
19 November 2017
Dutch Finance Minister Jeroen Dijsselbloem, who leads the eurozone negotiators, says he is prepared to release part of the remaining aid to Greece only if it adopts immediate reform. Photo: Reuters
Dutch Finance Minister Jeroen Dijsselbloem, who leads the eurozone negotiators, says he is prepared to release part of the remaining aid to Greece only if it adopts immediate reform. Photo: Reuters

Greece warned to start reform for cash

Greece must implement immediate economic reform demanded by its creditors if it is to receive much-needed access to emergency funds.

Dutch Finance Minister Jeroen Dijsselbloem, who led a eurozone group that negotiated an extension of the Greek aid package, issued the warning as Athens faces a cash crunch this month, the Financial Times reported Monday.

Dijsselbloem said he is prepared to make a “first disbursement” of 7.2 billion euros (US$8 billion) remaining in Athens’ 172 billion-euro bailout as early as this month.

But the funds will only be transferred if the new Greek government, which for weeks has campaigned to kill certain austerity measures in the existing bailout, adopts reform the two sides can quickly agree on.

“My message to the Greeks is: try to start the program even before the whole renegotiation is finished,” Dijsselbloem said.

“There are elements that you can start doing today. If you do that, then somewhere in March, maybe there can be a first disbursement. But that would require progress and not just intentions.”

Dijsselbloem’s remarks signal mounting concern in the eurozone over the risk that Athens is quickly running out of money to pay its debts and keep the government running despite last week’s agreement to extend its EU bailout for another four months.

Under the extension, formally completed on Friday, Athens will only get bailout cash if it implements a full list of economic reform — a process that could take months.

But officials from Greece’s bailout monitors estimate Athens could run out of cash in the next two to four weeks, raising the prospect it may not be able to meet about 4.3 billion in debt payments it owes in March, which includes 1.4 billion euros to the International Monetary Fund.

Athens has suggested it could meet the funding shortfall if the European Central Bank lifts a 15 billion-euro ceiling on the amount of short-term debt Greece can issue.

But ECB policymakers are reluctant to raise the limit, with some arguing it would be improper for central bankers to provide the short-term financing that Dijsselbloem and his fellow ministers have explicitly ruled out.

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