Eurogroup agonizes over Greek exclusion

The finance ministers of the Eurogroup want to keep Greece in the euro, but their patience is rapidly draining. In the meantime, Eurogroup President Jean-Claude Juncker has a clear message for Athens.
The Eurogroup is caught on the horns of a dilemma – it wants to keep Greece in the currency union, but there is still no government in Athens that would be ready to fulfill the necessary austerity and reform conditions. And the money-supplying nations have no intention of simply handing over the cash unconditionally.
German Finance Minister Wolfgang Schäuble refuses to alter the painstakingly agreed international bailout agreement. «The question is not ‘are we going to be a bit more generous to Greece?'» he said. «It’s about what is economically sustainable and justifiable.»
He said that the agreement that had been reached was the «most» that was even possible, and that he doesn’t see «how that has been changed by the elections in Greece.»
Luxembourg’s Finance Minister Luc Frieden backed up his German colleague: «We don’t have an agreement with a government. We have an agreement with the Hellenic Republic itself.»

Austrian Finance Minister Fekter is losing patience with the Greeks
Would Greece be allowed into the EU now?
Austrian Finance Minister Maria Fekter is particularly annoyed at the politicians in Athens who reject the austerity program but still want help. «It’s not acceptable if we hear signals that they don’t care what the requirements are, because the EU will pay anyway,» she said. «That’s not an attitude we expect from our negotiating partners.»
For Fekter, the situation is clear: if Greece doesn’t fulfill its conditions, there will be no more money. Nor does Fekter have any inhibitions about talking about a possible exclusion of Greece from the eurozone – and not only that.
«You can’t leave the eurozone, but you can leave the European Union,» she said. «Greece would then have to apply for re-entry. Then we’d have to consider very carefully whether Greece is fit to join the EU.» This was a sly reference to the false figures that reportedly helped Greece to gain entry to the currency union in the first place.
New elections will make things worse
But others are less gung-ho. Belgian Finance Minister Steven Vanackere believes that Greece’s exclusion from the eurozone would not «solve anything.» On top of that, there is the threat of contagion – the risk that other weak eurozone countries, particularly Spain, could soon be targeted by the markets.

New elections are looking ever more likely in Greece – but will they agree to the Eurogroup’s demands?
The Mediterranean country is a long way from agreeing its consolidation plan to ease it out of the crisis. Investors are demanding bigger and bigger risk surcharges for making loans to Spain, while Finance Minister Luis de Guindos sees his country as a victim of Greece’s government crisis: «Greece needs to make a decision and achieve political stability,» he said. «That would help the whole eurozone.»
His Irish counterpart Michael Noonan, whose country is also receiving international aid, is hoping for unity in Athens. He said Greece has a «democratic problem,» and that new elections would be no use: «Why start all over again?» he asked. But new elections in Greece seem to be growing ever more likely – though that hardly means the next Greek government will be more amenable to the tough austerity program.
Respecting Greek democracy
Juncker, meanwhile, is struggling to keep his house in order. Late on Monday, after the end of the latest Eurogroup negotiating session, he said he was annoyed by the «threats and lessons» being thrown at the Greek people – a barb that may well have been aimed at Fekter.
«I’m not for one second considering excluding Greece from the eurozone,» he said. «That is nonsense, that is propaganda, and we must respect Greek democracy.»
But despite these conciliatory words, he made it clear to the Greeks what he expects if they want his support to continue: a government, of whatever complexion, that will support the agreements of those providing the cash.

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