Tuesday, January 26, 2016

EU Slows Down on Greece Support as Compliance Trumps Urgency

January 16, 2016

Greece’s next bite of bailout money may turn into a movable feast if Prime Minister Alexis Tsipras can’t convince euro-area authorities he’s making good on his promises.

“Everyone got used to the fact the reviews take longer,” Lithuanian Finance Minister Rimantas Sadzius said in an interview on Friday. “Everyone’s prepared to demand that agreements are implemented at 100 percent.”

European governments won’t rush additional aid until Tsipras delivers on pledges to fix Greece’s pension system, update its labor markets and close fiscal gaps. A slow approach has already pushed borrowing costs to levels not seen since August and risks renewing last year’s conflict that nearly ended Greece’s membership in the euro area. Greek political party leaders will debate pension reform proposals in parliament on Tuesday, ahead of planned strikes by seamen, journalists, and lawyers against government policies.

Greece may get 4 billion euros ($4.3 billion) or more once the nation’s creditors complete a review of the most recent bailout, according to a euro-area official who asked not to be named because talks are ongoing. If Greece fails to unlock more funding it may face a cash crunch by the middle of the year.


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