Mar 13, 2015 10:16 AM

EU Commission chief says Greek reform talks are lagging

The Associated Press

BRUSSELS (AP) The European Union is urging Greece to speed up work on its economic reform plan so it can swiftly get rescue money that can help it pay upcoming debts.

With a deadline for completing the package fast approaching, EU Commission President Jean-Claude Juncker said he was "not satisfied" with developments over recent weeks, as he went into talks Friday in Brussels with Greek Prime Minister Alexis Tsipras.

"I don't think that we've made sufficient progress," Juncker said.

Greece's creditors in the 19-country eurozone agreed last month to extend the country's bailout program by four months on condition the government draws up a credible reform package by the end of April. Rescue loans have been frozen pending agreement, piling pressure on the Greek government at a time when revenues are below expectations.

Greek officials confirmed that the country paid a 348 million euro instalment to the International Monetary Fund due Friday, part of a total 1.5 billion euros Greece has to repay the Washington D.C.-based institution fund this month. Tsipras has pledged that the country will pay all debts that are due soon, even if rescue loans are not forthcoming.

Greece has depended on 240 billion euros ($255 billion) of bailout cash to meet its debt obligations since 2010 and avoid going bankrupt. However, the rescue money has come with strings attached. Successive Greek governments have had to impose harsh austerity measures and enact economic reforms to get the money. Even after the current bailout program expires at the end of June, Greece is expected to need further assistance.

Figures Friday showed that tax revenues are not coming in as planned. Preliminary budget figures showed revenues significantly off-target in February, although this was largely offset by a further reduction in spending. The primary budget surplus which excludes debt servicing costs was 1.2 billion euros compared to a 1.4 billion target.

Tsipras insisted that Greece is doing its utmost to move the reform process forward, saying that he has spent 90 percent of his time since his left-wing government came to power in January discussing short term solutions to the bailout issue. But he said that now it was up to the EU's institutions to do more.

"This is for our common interest," Tsipras said. "There is no Greek problem, there is a European problem."

Tensions between Greece, its eurozone partners and the institutions supervising the debt the Commission, the European Central Bank and the IMF have been heightened by the new government's continued election-style rhetoric and the EU's austerity demands.

Relations between Greece and Germany, Athens' most influential creditor, have notably deteriorated over Tsipras' plan to seek reparations from Berlin over World War II Nazi crimes.

European Parliament President Martin Schulz, who is from Germany, urged Tsipras and the eurozone to try clear up any misunderstandings, and said that raising the reparations issue is counter-productive.

"I find this absolutely inappropriate and we should not combine these two different things," he told reporters after Tsipras had left their press conference in Brussels.

Tsipras' visit came two days after technical talks started between debt supervisors and Greece aimed at fleshing out the reforms in more detail and establishing whether the whole package is even viable.

During their talks, Juncker and Tsipras agreed that Athens would set up a new task force to help it make better use of the EU funds it receives.

Greece has been allocated a total of 15.35 billion euros in so-called EU cohesion policy funds, which are aimed at helping bring poorer parts of the single currency bloc up to the same level as their partners.

A Greek minister will be appointed to supervise the process, along with Commission vice president Valdis Dombrovskis.


Nicholas Paphitis from Athens and Raf Casert from Brussels contributed to this article.


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