EU’s Juncker pushes for deal with Greece

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By Jan Strupczewski and Alastair Macdonald

EU chief executive Jean-Claude Juncker and Greek Prime Minister Alexis Tsipras called on Friday for European governments to show solidarity with Greece and resolve a credit crunch that risks dumping it out of the euro zone.

Their comments, as the bloc’s German paymaster presses its demands that Athens’ new leftist government honour commitments to international creditors, highlighted Juncker’s concern over a risk of grave damage to the EU, but may also fuel suspicion in Berlin that the EU Commission could try to water down any deal.

On the day after German Finance Minister Wolfgang Schaeuble said publicly that Greece might stumble out of the euro zone because its leaders had failed to negotiate new borrowings, Juncker sounded a note of urgency to EU governments.

“I don’t think we have made sufficient progress,” he told reporters as he welcomed Tsipras to the European Commission. “I will make certain proposals to my friend Alexis.

“I’m totally excluding a failure … This is not a time for division. This is the time for coming together,” he said, praising Tsipras for following a “pro-European track”.

Commission officials say Juncker, a long-time premier of Luxembourg who took over the EU executive in November, fears some leaders may be underestimating the damage “Grexit” — or “Grexident” — would do to European integration.

Schaeuble told an Austrian broadcaster on Thursday there was a risk of Greece losing the euro if negotiations failed: “As the responsibility, the possibility to decide what happens only lies with Greece, and because we don’t exactly know what those in charge in Greece are doing, we can’t rule it out,” he said.

While many Greeks resent the terms under which Europeans and the International Monetary Fund bailed them out since 2010, a majority wants to keep the single currency. That would be in jeopardy if the government ran out of credit, prompting Greek banks to lose access to euros from the European Central Bank.

TIME FOR “SOLIDARITY”

Tsipras, trying to satisfy lenders while also retaining the support of voters who elected him in January to end years of spending cuts, said Greece was doing its bit and others must now help ease its “humanitarian crisis” and mass youth unemployment.

“Greece has already started fulfilling its commitments … so we are doing our part and we expect our partners to do their own,” Tsipras said before his talks with Juncker.

“I’m very optimistic … we will find a solution because I strongly believe that this is our common interest. I believe that there is no Greek problem; there is a European problem.”

He added: “Now is the time to give a message of hope to the Greek people, not only implement, implement, implement and obligations, obligations, obligations — the message that the European institutions will give help and solidarity.

Juncker, a former chairman of the Euro Group of euro zone finance ministers, said he was trying to help promote an accord after weeks of mounting frustration and mutual incomprehension between the novice Greek leadership and the likes of Schaeuble and the Euro Group’s current Dutch chairman Jeroen Dijsselbloem.

“The Commission wants to be helpful,” he said. “But the Commission is not a major player in this because all the decisions … will have to be taken by the Euro Group.”

Some euro zone officials voiced irritation during last month’s negotiations at Juncker’s parallel dialogue with Tsipras and at Commission efforts to help draft compromise accords.

Commission officials have said the executive’s role has been to offer advice to an inexperienced Greek government. When Juncker first met him five weeks ago, he demonstratively grabbed the 40-year-old Tsipras by the hand and led him off for what EU officials said was effectively a tutorial on EU affairs.

On Feb. 20, Tsipras agreed to extend a 240-billion-euro bailout package to June but talks started only on Wednesday in Brussels on how Athens will meet conditions to unlock new cash.

The Euro Group agreed funds could be provided as long as Greece proves by next month that it is sticking to commitments to trim its massive debts. After June, Athens is expected to need another big set of loans from the other 18 euro zone governments and later also from the International Monetary Fund.

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Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]