Barroso says Greece is on its final warning - The Best from Greece

Posted on: 06/Dec/2011

European Commission President Jose Manuel Barroso has warned Greece that it has to meet the commitments it has made to its eurozone partners or else it will have to leave the single currency.

Barroso’s warning came a few hours after the International Monetary Fund cleared the way for Athens to receive its 8-billion-euro loan tranche in the next few days and as talks about a haircut for Greek bonds continue.

In an interview with German daily «Die Welt» published on Tuesday, Barroso stressed that that the debt write-down in the Greek aid package was a one-off.

He also called on Germany to keep assuring its peers it would do its utmost to preserve euro zone stability, and said this week's EU summit could be a turning point for winning back market trust.

"I know that Germany supports greater coordination and discipline and a more comprehensive approach to the crisis... but at the same time Germany should keep assuring its partners that it will do all it can to secure the stability of the euro zone, as is the case with the current rescue fund,» he said.

Asked what decisions from the summit on Dec 8 and 9 would be of most importance, Barroso said a move by European leaders to simplify how a country receives aid from the permanent bail out fund.

A qualified majority should decide whether a country can receive aid from the permanent rescue fund, he said, rather than all member states.

Barroso welcomed the meeting and declaration of German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris on Monday, who outlined a plan for imposing budget discipline across the euro zone.

Asked about possible changes to the European Union treaty, in order to allow greater budget discipline, Barroso said certain amendments could be pushed through rapidly.

"Four to five months is a realistic time frame in my opinion, depending on the type of treaty change,» he said.

Merkel downplayed the news that Standard & Poor's is examining the credit rating of 15 eurozone countries for a possible downgrade, saying the region is on the path out of its financial crisis.

She told reporters Tuesday that «what a rating agency does is the responsibility of the rating agency» but that leaders would plot a course to «regain confidence» when they meet later this week.

She says «I have always said this is a long process... and it will continue, but we charted the course yesterday with the French president and we will continue to stay the course."

Markets have been jittery following the news that S&P had placed 15 nations on notice for possible downgrades, including France and Germany, which both have an AAA rating.

Luxembourg Prime Minister Jean-Claude Juncker, who leads the group of euro-area finance ministers, said the warning by the rating company was like a “knockout blow” to governments that are undertaking measures to scale back deficits.

“I have to wonder that this news reaches us out of the clear blue sky at the time of the European summit -- this can’t be a coincidence,” Juncker said in an interview on German radio broadcaster Deutschlandfunk.

With the fate of the currency shared by the 17 euro states at risk, Merkel and Sarkozy are stressing their common platform going into the summit that aims to end the crisis that’s now in its third year. After Merkel compared the mission to a “marathon” last week, Sarkozy said yesterday that euro leaders would go on a “forced march” to win back confidence.

Among the measures announced were plans to fast-track the euro’s permanent rescue fund to 2012, one year earlier than envisaged. Germany and France will also seek to ensure that decisions by the fund, the European Stability Mechanism, can be made by a “qualified majority” rather than a unanimous vote by the participating governments. Sarkozy said they aimed to reach consensus on treaty change with other euro leaders by March.

“We don’t have time -- we are conscious of the gravity of the situation,” Sarkozy said after meeting with Merkel over lunch at the Elysee palace. “We want to go as fast as possible based on this agreement between France and Germany, which is open to others.”

[Combined reports]

source: http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_31833_06/12/2011_417575

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