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August 1, 2021

France’s Hollande backs Greece but urges credible reform

A positive report from the ‘Troika’ is essential for Greece to get the next EUR 31.5 bln instalment of funds.
French President Francois Hollande praised the Greek people on Saturday for making painful budget cuts, while urging them to do more to show their commitment to reforms to keep their country in the eurozone, according to thestreet.com. “For me, the question should no longer be asked: Greece is in the eurozone,” Hollande said after meeting Greek Prime Minister Antonis Samaras in Paris.
But like German Chancellor Angela Merkel, Hollande offered Greece no immediate relief from its current regime of painful austerity measures. On Friday, Merkel met with Samaras in Berlin and said she expects Greece to meet its previous commitments, while stressing Germany wants to keep it in the euro. Hollande also said that any decision on delays for Greece must wait for a report next month by the “troika” of Greece’s debt inspectors — the EU’s executive Commission, the European Cen­tral Bank, and the International Monetary Fund. Greece, Hollande said, “must demonstrate the credibility of its program and the willingness of its leaders to go all out all the while making sure that it is tolerable for the population.” He said Europe needs to make decisions about Greece “the sooner the better” — notably after the report is presented to a European Union summit in October.”
Hollande also recognized the efforts already made by Greece, whose people have had to endure painful austerity measures and five years of recession, CNN reports. However, Merkel said she was “absolutely convinced” that Samaras and his partners in Greece’s coalition government were doing everything they could to solve the nation’s economic problems.
Samaras, for his part, noted continued pressure within the financial markets amid concerns that Athens might not hold to its reform plans — and risk dropping out of the common currency. “Some continue to speculate against Greece …. to speculate by saying that Greece won’t pull through, that it can’t stay in the euro zone,” Samaras said. “I’m here today to say that will pull through — it will stay in the euro zone.” Greece voiced hope Sunday that a charm offensive around Europe by Prime Minister Antonis Samaras will halt a barrage of criticism as it labours to put delayed reforms on track and restore its credibility.” The effort will continue,” Samaras said.
On the other hand, German finance minister Wolfgang Schauble said that granting Greece more time to implement its austerity plans would not solve its problems, sharecast.com informs.
Troika officials are set to return to Athens in early September to complete their review. That means eurozone finance ministers will probably not make a decision on Greece’s bailout money until they meet on October 8. A positive report from the ‘troika’ is essential for Greece to get the next EUR 31.5 bln instalment of funds, part of a EUR 130-bln bailout, to keep it afloat.
President Obama Pressuring EU to Prevent
a Greek Euro exit
The British daily newspaper The Independent was reporting this morning that the Obama administration is trying to persuade European leaders to hold off on implementing any sort of Greek exit from the euro until after the No­vember 6 presidential elections in the United States, quoting Mediafax. Many analysts and economists have discussed the potentially disastrous ramifications of Greece leaving the euro in a disorder­ly fashion, including the spillover effects into the U.S. economy and financial markets. Accor­ding to The Independent, the Obama administration is concerned this would negatively affect its re-election chances in November.

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