THE HAGUE: A bailout deal between Greece and its EU-International Monetary Fund (IMF) creditors must be clinched on Saturday or there will not be enough time for it to get parliamentary approval, Eurogroup head Jeroen Dijsselbloem said.
“Tomorrow it really has to happen, for the simple reason that it has to go through parliament, first the Greek then of several member states,” the head of the group of eurozone finance ministers told journalists in The Hague on Friday.
Fraught talks aimed at hammering out agreement on releasing emergency aid for Athens are to resume in Brussels on Saturday, just three days before Greece risks missing a 1.5 billion euro ($1.7 billion) IMF payment that could trigger its exit from the single currency and even the EU.
Greece needs creditors to unlock the remaining 7.2 billion euros in its bailout to pay the IMF at the end of the month, but the lenders have refused until Athens agrees to new reforms.
“Ultimately the only thing we need is a package that gets Greece back on its feet, and that demands action be taken, much more on the reform front than on the cuts front, but action needs to be taken,” said Dijsselbloem.
New plans submitted Sunday by Greece aim to make eight billion euros in savings, mostly through new taxes on the wealthy and businesses, value-added tax increases and a cut in defense spending.
But in counter-proposals handed to Greece on Wednesday, creditors call for further measures on pensions, higher value added tax for restaurants, and for defense expenditure to be slashed by 400 million euros instead of the proposed 200 million euros.
“The whole of [Greek] society is disrupted, and has been for a while,” said Dijsselbloem.
“Think about the tax authority that doesn’t function any more, all foreign investors are leaving the country, people have no more trust in the government.”
“Trust must return. That requires a deal, a number of reforms and you have to go through with that. If you don’t feel that a number of reforms are necessary, then it never ends.”