European Commission President Jean-Claude Juncker and European Parliament President Martin Schulz sounded the alarm for the devastating consequences if Greece defaults on payments to the European Central Bank and the International Monetary Fund. Greek Prime Minister Alexis Tsipras met with the EC president last week and asked for political aid in Greece’s efforts to secure further funding outside the existing bailout program. According to a Real.gr report citing sources from inside the EC, Juncker stressed three points: First, the ECB cannot raise the limit on three-month treasury bills. Second, the Greek side must forget paying the IMF using profits on Greek bonds and concentrate on the completion of the fifth review. Third, the Greek government must stop wasting time and effort in renaming the review mechanisms or the bailout program and must concentrate and cooperate with the creditors’ representatives so that they implement required measures and reach a staff level agreement in order for the disbursement of the tranche. Greece has six weeks before going to the May Eurogroup to claim the tranche: four weeks of negotiations and two weeks to legislate the implementation of reforms. In these six weeks, Athens is required to close the 2015 fiscal gap, legislate reforms in tax system, value added tax and public sector employment, complete privatizations, and legislate “red loan” adjustments and labor reforms. Overall, Juncker told the Greek prime minister that he cannot intervene in Eurogroup issues and that the next meeting of euro zone finance ministers is very close. He also warned him that there are some finance ministers who are already preparing for the event of a Grexit. The European Parliament President Martin Schulz said to the Greek premier that Greece has lost ground in Europe and keeps losing allies because of its negotiation strategy. Sources close to Schulz cited in the report, claim that the European official said to Tsipras, “Mr. Prime Minister, I don’t understand what your strategy is.” After the meeting between the two men, the European Parliament president talked to the Press saying, “Mr. Tsipras came to me and asked me to mediate to resolve the short-term financing issue next week. I told him that he should talk with the ECB and the Eurogroup, not me.” When asked if he believes that the short-term financing issue will be resolved, he answered, “Those who believe go to church.”
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