Greece’s last Eurogroup or the beginning of a new solid European Union?

It looks like Italy will be the only "serious" ally of Greece today. Photo taken from last Tuesday's ECOFIN. From left to right: Mr Pier Carlo PADOAN, Italian Minister for Economic Affairs and Finance; Mr Yanis VAROUFAKIS, Greek Minister for Finance. (EC TVnewsroom, 17/02/2015)

It looks like Italy will be the only “serious” ally of Greece today. Photo taken from last Tuesday’s ECOFIN. From left to right: Mr Pier Carlo PADOAN, Italian Minister for Economic Affairs and Finance; Mr Yanis VAROUFAKIS, Greek Minister for Finance. (European Council TVnewsroom, 17/02/2015)

Today everyone’s eyes are fixed on the extraordinary Eurogroup meeting which is taking place in Brussels. This is simply put one of the most important gatherings in the Union’s history because one of its member states is under the “dilemma” of staying within the Eurozone by signing an extension agreement or exit and face imminent bankruptcy. This country is no other than Greece which is expected to be having both “allies” and “enemies” during this session.

The Greek government represented by the Minister of Finance Yanis Varoufakis expressed its will and need for an extension of the loan agreement or more precisely of the “Master Financial Assistance Facility Agreement”, by sending yesterday an official letter to the president of the Eurogroup, Jeroen Dijsselbloem. The latter found Greece’s request adequate to convene a meeting with the rest of the Finance Ministers of the Eurozone in order to discuss this matter more thoroughly and conclude.

Greece’s proposal

It was only yesterday that the Greek government managed to officially state (in written) its purposes and reply to the rest of the European countries that were arguing in the last EU Summit and Eurogroup that they had no clue about Greece’s intentions and what exactly they really wanted. Yanis Varoufakis wrote a very “delicate” and “well-prepared” letter to Jeroen Dijsselbloem saying among others:

“The Greek authorities are now applying for the extension of the Master Financial Assistance Facility Agreement for a period of six months from its termination during which period we shall proceed jointly, and making best use of given flexibility in the current arrangement, towards its successful conclusion and review on the basis of the proposals of, on the one hand, the Greek government and, on the other, the institutions”.

Support or NO support?

The decision of the President of the Eurogroup to convene a meeting where the Greek request will be discussed didn’t come unanswered by the German government. The German Minister of Finance, Wolfgang Schäuble rushed to reject the proposal characterising it as “trojan-horse” and inadequate since it does not secure that Greece will follow the necessary reforms.

However, the telephone call between Angela Merkel and Alexis Tsipras which lasted about an hour was enough to calm things down and reveal that both sides seek for a beneficial solution for Greece and Eurozone. Furthermore, the Minister for Economic Affairs and Energy and Vice Chancellor of Germany, Sigmar Gabriel, stated that the request of the Greek government is a step towards the right direction and triggers further negotiations.

Slovakia’s Prime Minister is in favor of a friendly “Grexit” if Greece doesn’t sign and commit to implement structural reforms. The same policy applies for Finland which is clearly supporting Schäuble’s positions.

On the other hand, the Minister of Economy and Finances of Italy, Pier Carlo Padoan, is going to vote for Greece’s stay in the Eurozone in today’s Eurogroup. It was announced by the Italian government that Mr Padoan will go to Brussels for the meeting despite the fact that there is a crucial discussion about the country’s labour reform. This shows clear understanding of the importance of the situation by the Italian government and reveals also the very good relationship between the two countries.

The second biggest economy in Europe, through its Prime Minister Manuel Carlos Valls Galfetti, said before the meeting of the 19 Finance Ministers that there is still hope and a solution is more likely to come for Greece. The statements of the European Commission and more specifically of its president Jean-Claude Juncker were similar mentioning that the Greek request was a “positive sign”.

Last but not least, the U.S. remains neutral but is pointing the finger to Athens to find a commonly agreed solution for everybody’s sake.

National parliaments the last word

The outcome of the meeting, if positive, is not the final one since it must be brought to the national parliaments, who will have to approve it. Thus, countries such as Finland and Germany have to take some time to vote for the issue of the extension of Greece’s loan agreement. This is something that must be taken into serious consideration by the representatives of each EU member state during the negotiations because time runs out on 28 February; the last day of the current bailout programme for Greece.

Grexit: a possible outcome or something that will be avoided at all costs?

GREXIT” is not out of the question in today’s meeting but is very difficult to happen since it is not just one or two countries that decide for Greece’s fate but 18. This fact makes a negative outcome even more unlikely, because it is quite hard to imagine that common sense will not prevail in the end; even Germany should have some of that.

But even in the case that there will be no result during this Eurogroup and Greece will face a dead-end, then the last “word” will probably be said and addressed to the Greek citizens, the majority of whom don’t want an exit from the Eurozone and won’t allow their country to go bust.

All in all, Eurozone is now facing one of its most historical moments; save a member state from bankruptcy or let it exit and change the way we think of this “union”.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Half the world’s population is still offline. Here’s why that matters

How can consumers be effectively protected from insurance sellers?

GREXIT final wrap-up: nobody believed Aesop’s boy who cried wolf so many times

Ercom, cutting-edge Telco solutions from Europe

EU budget: Boosting cooperation between tax and customs authorities for a safer and more prosperous EU

The vicious cycle of poverty and exclusion spreads fast engulfing more children

The global economy isn’t working for women. Here’s what world leaders must do

European Confederation of Junior Enterprises hosts in Geneva the Junior Enterprise World Conference

Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

Eurozone banks to separate risky activities: Can they stay afloat?

EU Commission closer to imposing anti-dumping duties on Chinese solar panel imports?

Parliament sets up plan to fight the 3,600 criminal rings of EU

Force used against protestors in Gaza ‘wholly disproportionate’ says UN human rights chief

Germany objects to EU Commission’s plan for a Eurozone bank deposits insurance scheme but Berlin could go along

A day in the life of a refugee: the wait

Future EU farm policy: Agriculture MEPs urge fair funding, no renationalisation

Is a full course lunch, a new Commissioner and 2 million anti-TTIP citizens what you would call a “Fresh Start”?

The reason the world showed limited empathy to the Orlando victims

Does the world have strong enough institutions to handle risks like Trump and Brexit?

Economic sentiment and business climate stagnate in miserable euro area

Refugee crisis: Commission proposes a new plan urging EU countries to help Italy

Italian elections: a long political limbo is ahead

EU leads the torn away South Sudan to a new bloody civil war

EU elections: The louder the threats and the doomsaying the heavier the weight of the vote

Artificial Intelligence has a gender problem. Here’s what to do about it

Can Kiev make face to mounting economic problems and social unrest?

Why lay people don’t expect anything good from G20

Why France, Italy and the US press Germany to accept a cheaper euro and pay for Greece

IMF’s Lagarde: Ukraine must fight corruption

Nature is our strongest ally in ensuring global water security

Reflections on the the biggest refugee crisis since World War II

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

We can build a carbon-neutral world by 2050. Here’s how

Tourism offers much to the EU gets a little

EU growth in 2015 to be again sluggish; Can the Juncker Commission fight this out?

“As German Chancellor I want to be able to cope with the merger of the real and digital economy”, Angela Merkel from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

Merry Christmas from Erdogan, Putin, Mogherini and the Polish firefighter

Politics needs to “Youth UP” in order the ensure the future of our democracies

TTIP is not dead as of yet, the 15th round of negotiations in New York shouts

Benjamin Franklin was wrong: Amazon can tax evade

The EU lets the bankers go on rigging the benchmarks

Everyone has ‘a moral imperative’ to uphold the rights of persons with disabilities, says UN chief

A Brussels antithesis reveals where the EU is heading

The opportunity of studying Medicine abroad

Professional practices of primary health care for Brazilian health and gender inequality

Mining the deep seabed will harm biodiversity. We need to talk about it

The US may be “open” to reviving TTIP, while the EU designs the future of trade with China

At last a solid base for the European Banking Union

IMF: The global economy keeps growing except Eurozone

EU Trust Fund for Africa: Can it be beneficial for Italy and tackle the migration crisis in the Mediterranean?

The cuts on 2014 Budget will divide deeply the EU

Income inequality threatens the socio-political structures in developed countries

The US banks drive the developing world to a catastrophe

GSMA announces speakers for Mobile 360 Series-West Africa

Greece at the mercy of ECB while sailing through uncharted waters

Further reforms needed for a stronger and more integrated Europe

France pushes UK to stay and Germany to pay

Lack of investment and ambition means Youth Guarantee not reaching potential

Capital markets selloff: The financial moguls send messages to monetary authorities

More Stings?