In an interview with Der Spiegel, Greek Prime Minister Alexis Tsipras reproached the European Central Bank for not relaxing the pressure on Greece’s government to return the loans at a nearly impossibly fast pace. The bank refused appeals to raise the limit on short-term debt issuance, in the conditions where Greece has 6.5 billion euros to pay before the end of March. During a meeting in Cyprus on Thursday, March 5, the European Central Bank also rejected a proposition of providing ordinary loans to Greek banks again. Given this situation, Greece has to make an enormous effort to give its creditors guarantees that it will not go bankrupt. Tsipras, who metaphorically described the European Central Bank’s attitude as “holding the rope around Greece’s neck”, is afraid that if no assistance is granted, “the thriller we saw before February 20 will return”, alluding to the tumult that negotiations with creditors have caused on Greek markets.
After having paid 300 million euros to the International Monetary Fund on Friday, March 6, the country has 1.2 million left to pay in loan redemptions to the IMF in the following three weeks. Because the next wave of bail-out money, consisting of 7.2 billion euros, will be received by Greece only in April, March is a particularly tough month for the Tsipras government. Yanis Varoufakis, the Finance Minister, submitted a document containing eleven pages of reforms planned by his government to the attention of the other EU ministers, who are scheduled to have a meeting on Monday. These reforms include fighting tax evasion by using undercover agents. Varoufakis assured the public that his Leftist government will overcome the financial difficulties of this month by resorting to “alternative plans”, including a risky temporary recourse to pension fund reserves to overcome liquidity issues.
Tsipras in his turn tried to arrange a meeting with Jean-Claude Juncker, the head of the European Commission, but was refused so far. According to a Syriza spokesman, the two officials might nevertheless meet next week, when the use of European funds for solving the unemployment crisis could be discussed.
Yannis Stournaras, Greece’s central bank governor, gave guarantees that “no danger” of insolvency lurks over the country, because, according to him, Greek banks are “sufficiently capitalised” and there is “absolutely no problem with deposits”. He announced that the Greek government will be working all through the weekend to make sure Monday’s meeting will be a successful one. In the last quarter of 2014, the investment rate in Greece grew by 0.4% and a weaker euro determined a growth of the Greek export rate.
image source: The Telegraph