EU aides play down Greek reform plan

Eurozone officials played down plans submitted by cash-strapped Greece to its international creditors in a bid to secure fresh funds, a day after Athens’ outspoken finance minister irked EU partners by raising the prospect of a referendum.

Speaking before finance ministers of the currency area meet in Brussels on Monday, Eurogroup chairman Jeroen Dijsselbloem said steps outlined by Finance Minister Yanis Varoufakis in a letter last week were serious but “far from complete”.

“This is a process that’s just going to take a long time,” the Dutchman said, adding that it would be very difficult to complete Greece’s reform program during the four-month extension of its EU/IMF bailout that runs until end June.

Varoufakis, who wants a negotiated restructuring of Greece’s debt to official lenders, said in a newspaper interview published on Sunday the leftist-led government could call a referendum or early elections if European partners rejected its debt and growth plans.

The Finance Ministry later clarified that the Marxist former academic had been replying to a hypothetical question and that any referendum would “obviously regard the content of reforms and fiscal policy” and not whether to stay in the euro.

A senior politician in German Chancellor Angela Merkel’s conservative bloc said on Monday that Greece would be better off outside the 19-nation euro zone, suggesting that Finance Minister Wolfgang Schaeuble privately shared that view.

“By leaving the euro zone, as Finance Minister Schaeuble has suggested, the country could make itself competitive again from a currency perspective with a new drachma,” former transport minister Peter Ramsauer, a member of the Bavarian Christian Social Union (CSU), wrote in Bild.

Merkel and Schaeuble have both said publicly they want to keep Greece in the currency area. But in a sign that German sentiment may be shifting, Ramsauer said a temporary “Grexit” would be a “great opportunity” for the country to boost its economy and administration “making it fit to return to the euro area from a position of strength”.

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell