The Dutch finance minister said Thursday the Greek crisis was ?back to square one? as the country?s economy was much worse than had been expected at the beginning of the crisis.
?We?re back to square one,? Jan Kees de Jager told a parliamentary committee in The Hague. ?Greece is in a much worse state than had been anticipated at the time.? Eurozone leaders for several weeks have been negotiating Greece?s desperately-needed rescue package of 130 billion euros in fresh loans and a write-down on privately-held government bonds worth 100 billion euros to avoid defaulting on debt owed on March 20.
Eurozone government sources said Thursday that the rescue would still be insufficient to meet a debt reduction target to make the country?s steep repayments sustainable in 2020.
De Jager said that Athens still had not taken all the measures required to secure the package. ?We will approve it only if all the necessary measures are taken,? he warned.
The minister also said that an exit from the eurozone would cost other European countries more than saving the country?s economy now.
?The goal is to keep Greece in the eurozone,? he told Dutch MPs.
In an interview with influential Dutch financial daily Het Financieele Dagblad earlier Thursday, De Jager warned that payment of aid funds to Greece may be delayed until after its April elections, as the eurozone wants assurance that any new Greek government would keep its promises.
?Ideally after the elections, you want to deal with rulers that you know will give their support to the package,? he said.
?Therefore it has been suggested to wait until after the elections, where you can agree to commitments with the new government,? he said.
Eurozone leaders also want more Greek leaders to commit to meeting the conditions required by public creditors the IMF, the EU and the ECB.
Asked if he expected more signatories before April polls, De Jager said: ?Our confidence has reached an all-time low.? De Jager said the Netherlands wants Greece to start implementing the key elements of the package before giving clearance for the release of bailout funds.
?With that, we don?t even have to wait for the elections,? he said.
He added an expected debt sustainability analysis by the IMF was also ?of huge importance.? ?I don?t understand why this is not important to some of my colleagues,? he said adding ?if you lend money to a country, then you do want to know what the chances are that you would get it back.? ?I am not available to lend money to a country without such a debt sustainability analysis.?
In Brussels, a senior official told AFP on Thursday that a report given to finance ministers showed Greece?s total public debt would only fall to 129 percent of Gross Domestic Product, instead of the 120 percent set as a condition for fresh aid by the EU and International Monetary Fund. [AFP]