Merkel tells Tsipras it’s time to back talk with policy action
German Chancellor Angela Merkel told Greece’s Alexis Tsipras it’s time to back up his good intentions with the policy action required to release aid.
During two hours of talks in Brussels that began late on Wednesday and also included French President Francois Hollande, Tsipras said his government will work with “higher intensity” to find a deal, a German government spokesman said in an e- mailed statement. The discussions took place in a “constructive atmosphere,” the spokesman said.
“The willingness is there to cooperate with the three institutions, it’s now a matter of acting on that,” Merkel told reporters on Thursday. “There was absolute unity that Greece will continue to work emphatically and resolutely with the three institutions in the coming days to clear up all open questions as far as possible.”
With the country’s banking system on the brink and Tsipras’s rearguard action running out of road, Greece’s creditors are leaning on the prime minister to deliver a package of economic reforms and budget fixes to get the country’s finances on track. Tsipras has until the end of the month to release a payment of as much as 7.2 billion euros ($8.2 billion) from the country’s rescue package before the agreement expires.
Greek stocks, which have lost 23 percent since Tsipras began to close in on government in December, jumped as much as 5.8 percent in Athens on Thursday, the biggest gain since February.
Another Extension
Tsipras will meet with European Commission President Jean- Claude Juncker in Brussels on Thursday where both men are attending a European Union summit with Latin American countries, a Greek government official said. The encounter will be a chance for the two leaders to build bridges after exchanging barbs over the past week.
“I hope this brings about the necessary progress,” Merkel said. “Every day counts.”
Greece wants a nine-month extension to the bailout to allow more time to work out its reform program, an official from the administration in Athens said Wednesday. It’s difficult for Tsipras to concede more ground to the country’s creditors, the official added.
Actually, most Greeks may be ready for Tsipras to bow to the creditors’ demands, according to a Marc poll of 1,001 people conducted this week for Alpha TV. In the survey, 50.2 percent of respondents said Greece should accept the creditors’ plan compared with 37.4 percent who said the prime minister should stand firm.
Syriza leads the main opposition party, New Democracy, by 34 percent to 20 percent and 77 percent said they wanted Greece to stay in the euro. The pollster gave no margin of error.
ECB Action
The European Central Bank already handed Greece a boost, authorizing the biggest increase in emergency funding for the country’s banking system in almost four months during a teleconference on Wednesday.
The Governing Council increased the limit on Emergency Liquidity Assistance by 2.3 billion euros ($2.6 billion) to 83 billion euros to replace deposit outflows. Before the ECB stepped in, banks’ cash reserves were down to about 700 million euros, a person familiar with the data said.
“Policy makers are losing control of the situation on the ground,” Mohamed El-Erian, chief economic adviser at Allianz SE and a Bloomberg View columnist, said in a television interview. “Even if you come up with another band aid, this is not a situation that’s going to be solved any time soon.”
[Bloomberg]
