tagged: default, Der Spiegel, eurogroup, Greece, interview, Jean Claude Juncker, march

DER SPIEGEL: Juncker Does Not Exclude Greek Default

Posted by keeptalkinggreece in Economy

While dramatic negotiations are taking place between the Greek government and the Troika in Athens, Jean-Claude Juncker, the head of the Eurogroup, used a German magazine to put more pressure on Greece. In an interview to Der Spiegel, Juncker warned there there will be a default on march, shouldn’t the debt-ridden country comply with the demands of its lenders.

“Greece could no longer expect solidarity from other euro zone members if it cannot implement reforms it has agreed.

“If we were to establish that everything has gone wrong in Greece, there would be no new programme, and that would mean that in March they have to declare bankruptcy,” he said.

The very possibility of bankruptcy should encourage Athens to “get muscles” when it comes to implementing reforms, he added.

On the brink of bankruptcy, Greece must wrap up talks with foreign lenders on the bailout and quickly get political approval to ensure funds begin flowing in time for it to pay back 14.5 billion euros of bonds falling due in mid-March.”(Reuters)

Greece’s lenders threaten not to give the debt-ridden country the next aid of the first bailout, amounting 80 billion euro, before a PSI and a new agreement on the second bailout are completed. without this money, Greece will not be able to redeem the bonds maturing in March.

Further, Juncker cited a promised privatisation drive and the struggle against rampant corruption in state administration as two areas that needed particular attention.

“Greece must know that we don’t step back in the privatization issue” Jucnker told Spiegel and mentioned tha harm that is caused in the image of the country due to corruption. “There is corruption in all levels of the administration”.

 **** The Sunday meeting between PM Papademos and the Troika concluded at 3 pm. Papademos is due to meeting the leaders of the parties forming his coalition government and disclose the results of the negotiations.