Constanza Morales Huidobro
Yanis Varoufakis, Greek Finance Minister greets Christine Lagarde, managing director of the International Monetary Fund, while Jeroen Dijsselbloem, Eurogroup chief looks.
The high expectations that existed about a possible agreement on Greek debt during yesterday’s special meeting of finance ministers from the area euro vanished even before the session began, with various authorities stating that the meeting was only to know the plan of Athens and it would take time to reach consensus.
“The joint ambition is to achieve a solution and I think that’s possible. There will be no solution today (yesterday), this is step by step. There is no guarantee of success, “he said yesterday morning outside parliament Jeroen Dijsselbloem, president of the Eurogroup.
The Minister of Finance of the Netherlands added that” at the next meeting of February 16 hope to have more progress “.
Upon arriving at the meeting in Brussels, Dijsselbloem said” depends mainly on the Greeks make its economy back on track. “
In the same vein, Pierre Moscovici , the European commissioner for economic and financial affairs, taxation and customs, said “we know it will take some time to find a solution.”
While both parties wish that Greece remains in the euro zone and return growth, the French official said the government “must understand that commitments should be honored.”
Moscovici stated that the current aid package is the basis for discussion and that any commitment can only given within this legal framework.
Meanwhile, Luis de Guindos said yesterday’s meeting only served to make contact and said that “the important meeting will be next week.”
The head of the public finances of Spain warned that Athens has to respect the rules are for everyone.
Four Principles
The talks between the 19 members of the single currency, Christine Lagarde, managing director of the IMF and Mario Draghi, President of the European Central Bank, extended for about four hours.
In his debut within the Eurogroup, the minister Greek Finance Yanis Varoufakis presented four principles for a new financing agreement, according to two European officials quoted by Bloomberg.
Greece wants an agreement to deliver financial stability, financial sustainability and debt restructuring and the while addressing the humanitarian crisis. Sources acotaron that Varoufakis not provide details on how to achieve these goals.
At press time, still no agreement between the parties could, which means that discussions will resume on Monday.
Working with OECD
Meanwhile, Prime Minister Alexis Tsipras agreed to work with the Organisation for Economic Co-operation and Development (OECD) to implement reforms ten economic, but warned that the country will not allow outsiders to decide what policies should be adopted.
“This is not an outsider who comes here and tells us what to do,” said the premier in Athens after meeting with Angel Gurria, Secretary General of the OECD.
Tsipras explained that the program will be based “not on what is decided beforehand, but in the popular mandate,” before adding that “I will soon be in Paris to formalize this cooperation and agree on next steps “.
The head of the club of rich countries said the agency” does not tell the Greeks what needs doing. Discuss tools and mechanisms “and that” we want to help Greece to return to growth. “
Gurría appeared to endorse the criticism of Tsipras on the current bailout program.” The crisis produced low growth, high unemployment and … Greece has it been this very directly, “he said. The authority said the crisis generated” growing inequalities and a serious erosion of trust “.
Contagion limited
Meanwhile, the Standard & amp agency; Poor’s estimates the risk that the turmoil in Greece spreading to the rest of the block is under
“The risk premium of Greece has recently increased dramatically. again, but the panic has not jumped to other former countries in crisis. The risk of infection does not seem to be really big, “said Moritz Kraemer, head of sovereign ratings from S & amp;. P, the German newspaper Börsen-Zeitung
Although it is difficult to predict the effects you could have a Greek exit from the eurozone, the expert suggested that the region could face either the scenario.
“The Greek economy is very weak and its links with the rest of the euro area are even smaller suggesting added value, “Reuters quoted.
As for a possible cut debt, Kraemer said that” contrary to public perception, the extent of liabilities is not as high in proportion to the economic strength of creditors “.
debt reached 185% of GDP in 2014
Despite the large efforts made by Greece to cut spending, government borrowing continued to increase over the past year.
Deputy Finance Minister Dimitris Mardas reported yesterday that public debt rose to 185% of GDP in 2014, corresponds to ten points higher than the figure recorded the previous year.
“The Greek debt at the end of 2014 was 316,900 million euros, ie 185% of GDP. With this level, the debt is not sustainable, “he said. He explained that even if the debt had remained at 175%, that level is not sustainable.
In late 2010, the year that Greece signed the first bailout, the local debt was 146% of GDP. ratio increased to 171% the following year in 2012, after partial debt relief in private hands that formed part of the second aid plan fell to . 157% of GDP
The European Commission forecasts that Greek debt will decrease to 125% of GDP at the end of 2020 and 112% two years later
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