Euro zone loses patience with Greece
Euro zone finance ministers told Greece on Saturday it could not go ahead with cheap Minnesota Vikings jersey an agreed deal to restructure privately-held debt until it guaranteed it would implement reforms needed to secure a second financing package from the euro zone and the IMF.
Euro zone ministers had hoped to meet on Monday to finalize the second Greek bailout, which has to be in place by mid-March if Athens is to avoid a chaotic default. But the meeting was postponed because of Greek reluctance to commit to reforms.
Instead, the ministers held a conference call on Saturday to take stock of progress on the second financing package, which euro zone leaders set at 130 billion euros back in October.
"There was a very clear message that was conveyed from all participants of the teleconference ... to the Greeks that enough is enough," one euro zone official said. "There is a great sense of frustration that they are dragging their feet.
"They should get their act together and start talking honestly, decisively and speedily with the Troika on the aspects of the programme that remain to be finalized - on fiscal and labor market reforms," the official said.
The Troika are the representatives of the European Commission, the European Central Bank and the International Monetary Fund, who have prepared a Greek debt sustainability analysis on which the second financing programme will be based.
"The main issue is the lack of reform, or prior action, in Greece," a second euro zone official said.
Euro zone ministers were also dissatisfied with Greek Finance Minister Evangelos Venizelos because they believed the minister was paying more attention to his position within his party ahead of the April elections, than to talks about reforms.
"There is a great sense of frustration with Minister Venizelos, who is very hard to get hold of because he is very busy campaigning for Reebok Washington Redskins #55 Jason Taylor jersey the leadership of (the Greek party) PASOK, so he is not available to meet with Troika members," the first official said.
"He is preparing his own political future, rather than the future of his country. People are seriously disgruntled about that and have conveyed this very clearly to him this afternoon," the official said.
"There is an increasing sense of frustration that why should we honour our part of the bargain, which we have in the past, while Greece does not seem to care that much, and has not delivered their part of the bargain," the official said.
ATHENS ADMITS TO TOUGH TALKS
In Athens, Venizelos admitted to a growing sense of impatience with the Greeks.
"There is great impatience and great pressure not only from the three institutions that make up the troika but also from euro zone member states," Venizelos said after what he called a "very difficult" conference call with euro zone counterparts.
"The moment is very crucial. Everything should be concluded by tomorrow night."
Jean-Claude Juncker, who chairs the Eurogroup of euro zone finance ministers, voiced the possibility of default.
"If we were to establish that everything has gone wrong in Greece, there would be no new programme, and that would mean that in March they have to declare bankruptcy," he said in advance copy of comments to news weekly Der Spiegel.
Greece has secured a debt restructuring deal with private creditors to halve the value of Greek debt in nominal terms and in exchange receive new, 30 year bonds with #46 Ryan Torain jersey red an average coupon below 4 percent, officials said.
The restructuring is to help make Greek debt sustainable by cutting it to 120 percent of GDP in 2020 from 160 percent now.
But euro zone governments will only agree to bolster the debt restructuring, called private sector involvement (PSI), with 30 billion euros and further finance the Greek government through 2014 if Athens presses on with lagging reforms.
"The message to Greece now is very clear. The PSI as it stands now is broadly OK but we will not allow you to go ahead with the PSI unless we have guarantees that the rest of the reform to make the whole situation sustainable in the long run will be delivered," the first official said.
"We don't want to give them the PSI, because once we do, we surrender our leverage to obtain any more concrete commitments in terms of policy," the official said. "Before we go ahead with the PSI ... we want to have assurances that Greece is actually capable of implementing the second programme."
Debt restructuring is likely to hit Greek banks harder than others, because they hold a lot of Greek government bonds.
Some EU officials said on Friday that euro zone governments may now have to contribute closer to 145 billion euros than the originally envisaged 130 billion to the second financing package to help recapitalise Greek banks after the bond swap.
But there is strong resistance to that idea from several countries, including paymaster Germany.
"It is highly unlikely that the overall envelope will increase," the second official said.
"In some capitals there is San Diego Padres jersey wholesale absolutely no appetite whatsoever to reopen the size of the financing package," the first official said.
