EU parliament rejects possibility of 'Grexit'

Greek government still at odds with creditors as bailout deadline looms.

By Julie Levy-Abegnoli

25 Jun 2015

As European heads of state continue their crunch talks in Brussels to find a solution to the Greek crisis, parliament's political groupings have stressed the need for an urgent solution.

With Greece's bailout package due to expire in a matter of days, Athens is struggling to come up with a plan to pay back its debt that would suit the international monetary fund (IMF) and the rest of its creditors.

European People's Party group chair Manfred Weber complained that "a great deal of time has been wasted over the past five months. The slight growth that was being seen in Greece has been turned around. Greek banks, which were in a solid position, are facing increasing difficulties. [Prime minister Alexis] Tsipras' government is going to run Greece into the ground".


RELATED CONTENT


The EU bubble has been abuzz with the possibility of a so-called 'Grexit' in recent weeks, but Weber insisted that his group "wants Greece to stay in the eurozone. We are calling for a programme that will make this possible, to give the Greek people hope for a better future."

Yet he warned that, "the Greek government needs to bear in mind that conditions are essential. European solidarity can only come with Greek responsibility".

Tsipras had suggested increasing taxes to raise funds, but the IMF rejected this idea, instead calling for stricter pension reforms.

For Socialist group leader Gianni Pittella, "the conditions to hammer out a deal between Greece and its creditors have been met. The solution is on the table. Now more than ever, we are inches away from a possible comprehensive agreement that would benefit both Greece and the stabilisation of the EU in turn." 

"Therefore the [Progressive Alliance of Socialists and Democrats] group urges all parties involved - the IMF included - to take this very last step. The future of Europe is at stake here. A negative outcome of the negotiations will have very serious political implications for the European institutions".

However, now that the talks have been suspended indefinitely after no agreement was found, a deal appears to be more than a few inches away.

European Conservatives and Reformists group chair Syed Kamall said, "consider the patient that is the Greek economy. Each time we approach yet another Greek crisis, rather than taking the medicine and having the operation, we propose yet more expensive sticking plaster in the form of a bailout.

Until the next Greek crisis, when the solution is yet again more expensive sticking plaster, bail out or restructuring of loans, until the next Greek crisis, and so on".

The Eurorealist MEP wondered, "if and when we reach another deal, how long will it be before we are back here again? How long until the eurozone runs out of expensive sticking plaster? How much longer will see this blame game between member states?"

Guy Verhofstadt, chair of parliament's Alliance of Liberals and Democrats for Europe group, was of the same view, explaining that, "any deal will only be a temporary solution. In a couple of months, we will have to start negotiating the conditions for the next bailout package."

"As long as the fundamental problems in Greek society are not addressed, growth will not come back to Greece. A more radical approach is needed to deliver fundamental reforms. The Greek government should focus on exterminating the clientelistic system and the entrenched corruption in society".

"In the meantime, Europe will have to put in place a redemption fund to find a sustainable solution for all the European economies that are highly indebted", said the Belgian deputy.

Green co-chairs Rebecca Harms and Philippe Lamberts urged the member states to "agree to a restructuring of the Greek debt and, for example, a lowering of the interest rates. Moreover, the repayments must be linked to Greece's economic development." 

"They should also launch an investment plan in order to support the Greek economy towards a sustainable recovery and help it withstand the negative repercussions of the budgetary consolidation measures agreed for 2015 and 2016."

The two MEPs also called on the Greek government to, "unlike its predecessors, ensure that the state institutions start functioning effectively again. Furthermore, the pension system must be made fairer and all Greek citizens must have a right to receive sickness or unemployment benefit".

According to anti-corruption campaigners Transparency International, Athens suffers from "broad scale acceptance of and participation in corruption, even though it is condemned", with public officials often accepting bribes.

Greek deputy Dimitrios Papadimoulis, a member of parliament's Confederal group of the European United Left/Nordic Green Left slammed "the IMF and certain conservative governments, who are in a minority at European level", accusing them of having "started to undermine [Athens'] proposals. It seems they don't want to reach an agreement, even if it is in the shared interests of Greece and the EU. They want to humiliate the Greek people."

Papadimoulis pointed out that, "the Greek government, with the commission services, have put forward a proposal which ensures proper public finances and a primary surplus; which puts forward ways of combating red tape, bureaucracy and a client state; which would put an end to the early retirement of people of 40 and 50 years of age, which has been in place for decades in Greece." 

"Now is the time for everyone to make a contribution to help move towards a solution so that the word 'Grexit' can be banned from the EU lexicon and the Greek people and the country can embark on a path to growth."

After the EU heads of state failed to reach an agreement, all eyes are on their finance ministers, who have also convened in Brussels for further discussions.

 

Read the most recent articles written by Julie Levy-Abegnoli - MEPs vote against beginning negotiations on updating EU copyright laws

Categories

Industry & Finance
Share this page