Eurocommissaris Rehn: Griekse stemming cruciale stap voor tweede lening (en)
BRUSSELS - The EU commission and the German government on Monday (13 February) welcomed Greece's adoption of a further austerity package as a "crucial step forward" for securing a second bail-out, but more spending cuts are needed by Wednesday.
"The vote is a crucial step forward towards the adoption of the second programme," EU economics commissioner Olli Rehn i said during a press conference in Brussels.
He said he was "confident" that the remaining conditions - further spending cuts of €325 million and written pledges by the political leaders that the austerity programme will not be undone after elections due in April - "will be completed" by Wednesday.
This is when eurozone finance ministers are to meet in Brussels and approve the €130bn bail-out along with the voluntary debt restructuring by private bondholders to the tune of another €100bn.
Asked about the possibility of letting Greece default and exit the eurozone, Rehn said that this "would have a much worse outcome with devastating consequences, especially for weaker members of the Greek society." It would also have "very negative ramifications through the contagion and chain reaction for the European economy."
He argued it is now up to Greek politicians to take responsibility for new spending cuts. "The Greek authorities and political forces should now take full ownership and make the case for the second programme, and then fully implement it, in order to ensure the return of the country to sustainable economic growth and jobs," the commissioner said.
He added - in line with the thinking in Germany and Netherlands - that such measures have been needed in Greece for several years.
Athens should have "implemented most measures to balance its economy and boost sustainable growth and employment even in the absence of such a programme, already many years ago."
Under the austerity plan, the minimum wage will be cut by 22 percent to €600 a month, supplementary pensions will also be reduced, employees made easier to sack and a series of state assets put on sale - measures that have sparked violence on the streets of Athens and other Greek cities.
In Berlin, the vote was also seen as an expression of Greece's determination "to take difficult measures to put the country on a good path," German government spokesman Steffen Seibert told reporters in Berlin on Monday.
"These measures ... are not savings for savings' sake, cuts for cuts' sake, they are reforms in all political areas and they are measures that should step-by-step give the country back its financial room for manoeuvre, which it needs to foster new growth and jobs," he said.
But German economy minister Philipp Roesler said the vote was just "a step in the right direction," adding that "we are still a long way from the goal."
"We want to see what comes after the legislative process because the legislative process is one thing, implementation is another," Roesler said on ARD public television.
He stressed that the pressure that Germany and the EU had applied on Greece to push through unpopular and harsh austerity measures "had been the right thing to do to push Greece forward."
A spokeswoman for the German finance ministry said that "final decisions" on aid for Greece could only be taken "at the beginning of March" when EU leaders meet for a summit in Brussels.
One of the sticking points is how to bridge a funding gap of around €15bn likely to be identified by the EU commission in its new "debt sustainability assessment" for Greece, to be discussed by eurozone ministers on Wednesday.
EUobserver understands that there is no consensus yet on allowing the European Central Bank and national governments to slash their profits on Greek bonds - a move relieve Greece's debt by the same amount.