Eurozone Leaders Show Signs Of Distrust After Reviewing Greece’s Reform Proposal

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Greek Prime Minister Alexis Tsipras won enough parliamentary support on Friday for Greece to accept some austerity reforms that Greece’s creditors have required before qualifying to receive a new bailout package that provides financial relief for Greece’s beleaguered banks and prevents Greece from declaring bankruptcy and possibly exiting the 19 member euro currency union.

The next test for Athens will come today and tomorrow when Eurozone finance ministers and EU leaders will meet to decide whether the 13 page list of austerity reforms that Prime Minister Alexis’ government submitted late last week goes far enough to unlock billions more in bailout funds as Greece’s economy grinds to a halt.

After dragging negotiations on for 5 months, relying on Greece’s creditors to throw out a temporary bailout extension that already expired, and holding a referendum last Sunday that revealed widespread support for rejecting austerity reforms, Greece’s creditors have become distrustful of Tsipras’ leftist government, the Greek public, and his ability to carry out and implement the list of reforms that he submitted with a lot of reluctance and dissension in his own party.

French Prime Minister Francois Hollande gave his support yesterday to the proposed austerity programme that Greece’s parliament narrowly approved yesterday after Tsipras relied on opposition vote from right leaning political parties.

“The Greeks have shown a determination to want to stay in the Eurozone because the programme they are presenting is serious and credible” Hollande said.

Hollande later admitted that “nothing is decided yet” and maintained that it still needs approval from Eurozone members.

After reviewing the reform programme, Eurogroup President Jeroen Dijsselbloem concluded, “We are still far away”.

“On both content and the more complicated question of trust, even if it’s all good on paper the question is whether it will get off the ground and will it happen. So I think we are facing a difficult negotiation” Dijsselbloem said.

German Finance Minister Wolfgang Schaeuble admitted that Saturday’s Eurogroup meeting with finance ministers was “going to be tough”.

Reuters is now reporting that Eurozone finance ministers told Greek Finance Minister Tsakalotos that Athens must offer deeper reforms to persuade them to open talks on a third bailout package.

Athens requested €53.5 billion to help pay its debts through 2018, although Greece’s creditors have concluded that Greece needs roughly €74 billion to meet its financial obligations.

-Johnathan Schweitzer

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