Greece has until Monday to show how it will follow through on reform commitments after the euro area ruled out speedy access to aid funds, three officials said following a conference call of finance ministry deputies.
The euro zone’s other 18 members were adamant on Wednesday’s call that Greece needs to deliver specific plans to see any more bailout cash, the officials said. Prime Minister Alexis Tsipras needs to show that Greece can rebuild trust in its promises, they said.
Finance deputies left the door open to 1.2 billion euros ($1.3 billion) that has been allocated to aid the banking system, as the deputies concluded that Greece can’t tap those funds on a technicality. As a result, Greece will have to show it will move ahead with the changes its creditors are seeking to get the bank-aid money or other bailout funds.
Greece won some financial breathing room Wednesday when the European Central Bank raised the ceiling for Emergency Liquidity Assistance to Greek banks by more than 1 billion euros to more than 71 billion euros, according to two people with knowledge of the decision who asked not to be named.
The ECB’s move alleviates some near-term cash needs in the banking system while keeping pressure on Tsipras to find a longer-term solution. European officials have said that Greece could default on its obligations within weeks unless there’s a breakthrough.
Greece needs to act faster so its actions can be more effective, Eurogroup Chairman Jeroen Dijsselbloem, who heads the euro-area finance ministers’ group, said in Rotterdam on Wednesday. “The main problem is the same in every country in Europe: getting things done.”
Monday will be a test of whether Greece can convince its peers that it will meet their demands for an economic overhaul, the officials said. Once Greece submits its next documents, they’ll need to be reviewed by the country’s official creditors and then the finance ministry deputies in the first few days of next week, ahead of Easter holidays, one of the officials said.
“After struggling for almost two months to force the bombastic Tsipras government to finally move beyond grandstanding and focus on the urgent need for providing a credible budget to the EU” the euro area won’t ease its demands, Sassan Ghahramani and Kevin Muehring of SGH Macro Advisors wrote in a note to clients. At the same time, they said, “discussions between the EU and Greece are now, finally, on a more constructive path.”
Earlier this week, Greece sought to gain access to the bank-aid money by saying it had already met the conditions for its disbursement. As a condition of last month’s rescue extension, Greece had to return 10.9 billion euros in bonds to the European Financial Stability Facility that had been sitting in Greece’s bank-rescue fund. Athens said some of that money had already been spent helping banks.
Finance deputies said Greece shouldn’t expect to regain access to the money unless it meets its aid conditions and follows all necessary procedures, including parliamentary approval in some countries. The EFSF said in a statement that legally, there was no overpayment.
Greece has “no reason to have recourse to this money,” German Finance Ministry spokesman Martin Jaeger told reporters in Berlin. To free the money up now, Greece would need the unanimous backing of euro-area finance ministers, he said.