It is now “realistic” to expect a third bailout for Greece, despite some progress made on the economy, the President of the Eurogroup has said.
Speaking before the European Parliament's budget committee on 5 September, Jeroen Dijsselbloem, said that the country was steadily improving its economy, but his seemed unlikely to stop Athens from requiring further financial assistance from its international creditors.
“It is clear, despite recent progress, that the problems will not go away,” he said, adding that it is realistic to assume extra support” will be needed. However, he insisted that “speculation at this time is not helpful.”
He said that the Eurogroup, as well as the European Central Bank, would not be in a position to properly determine the situation in the country before the end of this year. The financial institutions will meet in April next year.
“We will only be in a position to evaluate the Greek situation in 2014,” said Dijsselbloem.
The Eurogroup president was addressing the committee as part of his regular meetings with MEPs to discuss country-specific recommendations and structural challenges facing member states.
While he said it “is time to move away from crisis mode”, there is “still a long way to go,” before Europe's economic recovery is complete.
He said the Eurogroup and the European Commission will continue to “rectify economic imbalances” in the EU. This includes the approving of national budgets that are being prepared before the end of the year, including the Netherlands, where Dijsselbloem is finance minister. This has proved a controversial aspect of EU fiscal policy. There is currently speculation in Ireland that the commission will ask for extra spending cuts worth around €3 billion.
However, Dijsselbloem said that budget scrutiny remained a =n important policy in the light of the stability and growth pact.
He said that the recession in Europe was “deeper and tougher to deal with than we had hoped for.” however, he insisted that “I don't think you can say we have done the wrong things.”
Many reforms, he said, “still have to move forward,” but, slow progress was not down to the policies. “It is not so much about the quality of the reforms, but of the quality of implementation.”
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