By Andrew Jay Rosenbaum
ANKARA
As officials from Greece's institutional creditors arrive in Athens on Monday, there is concern that the pace of economic reform is too slow to secure further bailout funds for the cash-starved country.
Although the Greek parliament has passed the reforms imposed by the bailout agreement, some of the 18 other members of the eurozone are demanding further reforms before any payment is made.
The greatest pressure is from Greece’s largest creditor Germany. In an interview with newspaper the Bild am Sonntag newspaper on Sunday, former Finance Minister Peer Steinbruck complained that the European Central Bank (ECB) was too easily handing over money to troubled Greek banks.
“Overall, the politics of saving Greece has been a failure,” Steinbruck said.
Demands for additional economic reform are reportedly based on the original bailout agreement of 2010, which officials from Greece’s creditors such as the EU, the ECB and the International Monetary Fund (IMF) maintain are needed to restore the Greek economy.
However, Greece and its creditors are racing against the clock. On Aug. 20 Greece is due to repay another debt installment of 3.2 billion euros ($3.5 billion) to the ECB. A default would jeopardize bailout plans.
While the talks are ongoing, Greece is still operating under stringent financial controls. The banks are restricting withdrawals to 60 euros a day although some restrictions on taking money abroad and making international payments have been eased.
The Athens stock exchange remains closed and Greek officials must come to an agreement with the institutional creditors about when it may reopen.
Meanwhile, the Greek economy is faltering. Greek GDP is forecast to contract by up to 4 percent in 2015, compared to the 0.5 percent growth predicted earlier this year, according to EuroStat, the European Commission’s statistical service.
Next year, the economy could shrink by as much as 1.75 percent, the commission said, and Greece is not expected to see a return to growth until 2017.
Greece made its July 20 payment of around 4 billion euros to the ECB after it received an emergency bridge loan of 7.16 billion euros from the European Financial Stability Mechanism.
The country has paid its arrears to the IMF but on Friday requested a new loan, which cannot be decided until the IMF board meets, a spokesman said.
Despite the beleaguered financial condition of the country, resistance to the bailout has not weakened. The health and labor ministries are reportedly resisting cooperation with international creditors, causing delays in the bailout negotiations.
On Monday, disaffected members of the Syriza coalition will hold a demonstration in Athens against the bailout agreement.
