Illness means both Greece's new prime minister and finance minister will miss an anxiously awaited summit of European leaders later this week and delayed a visit by the country's international lenders.
The news was a blow to Athens’ attempts to ease the terms of
its bailout in the teeth of German opposition, as well as an
untimely complication for a summit that some hoped would take
new steps to grapple with the region’s debt crisis.
According to a document prepared for the June 28-29 meeting,
European leaders will discuss specific steps towards a
cross-border banking union, closer fiscal integration and the
possibility of a debt redemption fund.
But Prime Minister Antonis Samaras underwent eye surgery on
Saturday and Vassilis Rapanos is in hospital after suffering
from nausea before he could be sworn in as finance minister.
Instead, Greece’s foreign minister and outgoing finance
minister will attend the meeting to ask for the terms of the 130
billion euro ($162.96 billion) bailout to be loosened.
The unexpected turn of events forced the postponement of a
visit to Athens on Monday by officials from Greece’s “troika” of
lenders – the European Union, European Central Bank and
International Monetary Fund.
Athens faces a stern test at the two-day EU summit, with
euro zone paymaster Germany particularly resistant to giving
Athens any leeway.
German Finance Minister Wolfgang Schaeuble made his
country’s position all too clear in a bluntly worded interview
on Sunday, telling Greece to stop asking for more help and
instead move quickly to enact reform measures already agreed.
“The most important task facing new prime minister Samaras
is to enact the programme agreed upon quickly and without
further delay instead of asking how much more others can do for
Greece,” Schaeuble, a close ally of Chancellor Angela Merkel,
told Bild am Sonntag.
His comments came as the paper carried a poll of 4,000
people showing 78 percent of Germans and 65 percent of French
people wanted Greece to leave the euro zone, with 51 percent in
Spain and 49 percent in Italy also backing a Greek exit.
YET ANOTHER SUMMIT
Having once hoped this week’s summit could be a turning
point for the EU debt crisis, financial markets have toned down
expectations of concrete progress.
“We believe it will conclude with further general support
for the development of a roadmap towards tighter fiscal union,
but with significant preconditions attached to various stages of
the timeline,” said analysts at Barclays.
“We doubt that concerns about the method for the pooling of
national sovereignty can be sufficiently resolved in detail,
implying there will be further deliberations during the second
half of the year.”
The lack of excitement was palpable in the currency market,
where the euro was pinned at $1.2530 in Asian trade on
Monday, just a whisker above its lows of last week.
Analysts do expect some sort of growth pact to emerge from
the summit, though the touted spending of 130 billion euros is
modest at best.
There is likely to be heated discussion on issues such as
debt mutualisation and any pooling of liability under a banking
union, with Germany adamant that it will not be put on the line
to underwrite the liabilities of other euro zone countries.
No major decisions are expected at the summit and a
definitive solution seems a long way off.
European Council President Herman Van Rompuy hopes to have a
more thorough set of plans drawn up by the next EU leaders’
summit in October, or possibly the one after in December.
Key also will be the attitude of the European Central Bank
(ECB) which has fiercely resisted calls to become a lender of
last resort and help ease funding pressures in the region.
It took a small supportive step on Friday, relaxing its
collateral rules to let financial institutions pledge a wider
range of assets in exchange for cash. The move helps counter the
impact of credit rating downgrades.
