Juncker issues friendly warning to Greece

Eurogroup chief Jean-Claude Juncker on Wednesday provided the words of encouragement the Greek government had been looking for but also warned that Greece was facing its ?last chance? to stay in the eurozone and suffering from a ?credibility crisis.?

Following afternoon talks with Prime Minister Antonis Samaras at the Maximos Mansion, Juncker was effusive about Greece?s historic contribution to Europe and expressed confidence in the coalition?s ability to steer the country back on track.

?I am coming to Greece as a friend,? declared Juncker. He said he was ?totally against? the idea of Greece leaving the eurozone and demanded that European politicians who regularly speculate about whether Athens will be forced to quit ?keep quiet.? He agreed with Samaras that this speculation is undermining Greece?s efforts, particularly in terms of privatization.

The Luxembourg PM also praised the sacrifices made by Greeks, particularly those on low incomes, and noted some progress in reforms, such as in the labor market.

However, Juncker was also adamant that Greece had to quickly rebuild trust with its lenders. ?The truth is Greece is suffering from a credibility crisis,? he said. ?The first step should be to show Greece is taking fiscal consolidation seriously.? Greece is to present to troika officials, who will be in Athens at the start of September, plans for at least 11.5 billion euros of cuts over the next two years.

?As far as the immediate future is concerned, the ball is in the Greek court,? he said. ?In fact this is the last chance and Greeks have to know this.?

The Eurogroup chief would not be drawn on the issue of a two-year extension for the Greek program but admitted he discussed this with Chancellor Angela Merkel on Tuesday. ?This will depend on the findings of the troika mission,? he said. Juncker added that no discussion about a third bailout could happen before the troika report, due late September.

Juncker?s message about waiting for the troika report was echoed by Merkel, who Samaras will meet in Berlin on Friday. ?We won?t find solutions on Friday,? she said. ?Instead, we will wait for the troika?s report and then we will take decisions.?

Speaking to German newspapers Bild and Sueddeutsche Zeitung, Samaras said Greece would not ask for any additional funding if it is given an extension. Speaking ahead of Juncker on Wednesday, Samaras said he had informed the Eurogroup chief that the government was broadening the privatization program and speeding up reforms. He stressed the need for liquidity to return so small and medium-sized businesses could grow.