24 April – Eurogroup in Riga

In the 24th April Eurogroup, the European Commission process was overthrown and the hawks re-asserted themselves, demanding the troika’s return to Athens in order to end the ‘inefficiency’ of the Brussels Group. At the same time, a character assassination campaign kicked into gear against Varoufakis, claiming that during this Eurogroup the finance ministers had called him ‘irresponsible’ and accused him of being a ‘time-waster’, a ‘gambler’ and an ‘amateur’. Fake news...

Jeroen Dijsselbloem (00:01:54):

Uh, Pierre, [inaudible], welcome. Thank you for joining us. Um, the next item on the agenda is the,uh, situation in Greece. Uh, as you all vividly remember on the 20th of February and on the 24th of February, we agreed on, um, the starting point of the process and how the process should be managed. Starting point and of course the current program, allowing for flexibility, to-changes to be put in the program within the parameters of the program. And that process, um, has been going on since then and, um, we all share the urgency, sense of urgency of the need to make progress, to get the-that deal.

Jeroen Dijsselbloem (00:02:38):

So implementation can once again start. I would like to use this, um, uh, discussion now to be updated. First of all by the institutions, where we are, what progress has been made and what th-the key issues are, so we are informed and understand the state of play and of course I will also ask Yanis his perspective on the situation and his expectations for the coming weeks. Um, I think I will do it in one round, uh, and ask Pierre to inform us first unless Yanis wants to take the floor first, it’s up to you.

Pierre Moscovici (00:03:20):

Thank you Jeroen. Um, let me um, begin by saying that we uh, welcome the Greek authorities’ intention to cooperate with the Euro area and IMF and to work with the institutions. Following February’s agreement which is uh, our roadmap Greek authorities shared drafts set by these initiatives uh, further material provided in the course of March and April uh, has represented useful contributions uh, that in talks, in Brussels, in Athens, in Paris uh, they have been held in goodwill, uh, with discussions more open and focused and covered a wide range of issues.

Pierre Moscovici (00:04:06):

Uh, however, we must acknowledge that today, that only very small steps uh, have been made in terms of narrowing the policy gap. Overall, uh, current policy intentions do not yet represent what we expect, which is a critical package, measures that could deliver sustainable public finances, some financial system and a competitive economy. Uh, and discussions are moving, but in our view, they are moving slowly and let’s tell it as we believe it, far too slowly. Uh, unless change here seems difficult to achieve in the next week, a comprehensive package that offers a credible prospect of being able to complete the review. We need clarity, specifically to have confidence in the robustness and credibility of actions in the areas which have been indicated and others. Um, we have seen, uh, limited ambition uh, in key reform areas such as labor market, uh, pensions, or on the moratoria on auctions.

Pierre Moscovici (00:05:20):

We understand some of these may be particularly difficult, like the commitments made [in] the democratic electoral process, which we see as being fully recognized. And there is some room of flexible, but only if shortfalls in one domain are offset by ambitious delivery in others, which was the logic of the 20th of February agreement. Uh, let me raise just a few detailed points on some areas where differences exist.

Pierre Moscovici (00:05:52):

On fiscal and macro, we need to come to- common understanding. Realism in projections is needed, our starting point for discussion, cannot be one of no fiscal effort is needed in 2015, sufficient effort should be undertaken as needed over the medium run. We can consider a lower target for 2015 but there is still a gap to be closed and as [the Committee accept], so should ambition.

Pierre Moscovici (00:06:24):

Second, on labor market reforms. The gap is still large in consultation with social partners [inaudible] for minimum wages, collective bargaining, reversal of previous reforms. There are significant concerns on substance. We would urge the authorities to work within the current framework and assess what changes are needed to be implemented credibly. On pensions, uh, the change authorities seek will have significant fiscal cost [inaudible] On privatization, our long-standing ambitious plan is now de facto stopped. Although the government has indicated it intends to continue with some projects this year.

Pierre Moscovici (00:07:13):

We need to have further details, which have not yet been provided and to propose change on the remaining uh, assets. Tentatively, based on this cursory information received, we believe that the plan needs more ambition and that the risk is that it falls significantly short of what is expected financially from privatization. This also I think will be a very important signal to investors. Uh, on financial stability there are growing concerns about banks’ balance sheets.

Pierre Moscovici (00:07:51):

Uh, let me stress once again that policy initiatives need to be concrete, they need to be time bound and mutually consistent. Previously agreed measures need to be respected, uh, the institutions are willing to consider what could be substituted with equitable measures in line with government priorities. Once again this is about the flexibility which has been recognized in the agreement of 20th of February. But some changes must be carefully calibrated and discussed openly. We also talked about [inaudible] action. Rollback of measures and unilateral changes to policies and structural reforms are not expedient means of eventual progress.

Pierre Moscovici (00:08:35):

Policy initiative should be discussed ex ante, this principle must be respected mutually and the basis of work going forward. In this respect let me stress uh, our willingness to work and tackle authorities’ genuine concern on protecting the most vulnerable. But this needs to be done using targeted instrument directed at those who are most in need [inaudible 00:09:04]. Um, finally the evermore acute liquidity situation requires constructive [measures]. We welcome, the recent decision to centralize cash dispersed to all entities of general government. While this may provide some breathing space for the next few days, this solution we all know, cannot last.

Pierre Moscovici (00:09:31):

So to conclude, I would say that time, as we all know, is of the essence. That time is now extremely limited. Delays come with the risk, even liquidity change, [inaudible] there is an urgent need to revise the discussion process and I think all of that, a more comprehensive approach, if so, needs to be more efficient. It needs to increase chances of achieving real progress, substantial progress, decisive progress by the 11 May, which is the date of our next meeting. And to that hand, uh technical and policy discussions need to converge to achieve results. These should happen at the same time in both, I would say, sequential [inaudible] order [inaudible] one way [inaudible] to hold them in the same place and we can [inaudible find?] together.

Jeroen Dijsselbloem (00:10:37):

Thank you. Mario?

Mario Draghi (00:10:43):

Let me, first give you an update on the bank liquidity and [inaudible]. Renewed uncertainty about the discussions with the institutions on the conclusion of the review and on the ability to meet future debt obligations. Greek sovereign bond yields have reached the highest levels during this week since the debt restructuring in 2012. But there have been no significant contagion effects to other countries. At the same time the liquidity conditions of banks remain strained and fragile.

Mario Draghi (00:11:21):

We have seen accelerated deposit outflows since we last met, last time, on the back of increased uncertainty related to the discussions around the IMF Spring meetings. The adoption of the law on deposit transfers from the general government funds to the Bank of Greece and to a lesser extent the resolution of the small cooperative bank Panellinia. Due to the loss of deposits and other sources of financing the Greek banking system currently receives 111 billion euros of central bank liquidity, more than doubling last December’s reliance and the highest level as a share of GDP of any euro area country.

Mario Draghi (00:12:07):

On April 22, 2015, the governing council non objected to an increase the ELA ceiling of Euro 75.5 billion until and including 29th of April 2015 representing an increase of another 1.5 billion euro for the previous week. The ECB will continue extending liquidity to the Greek banks while there are solvent and they have sufficient collateral. However, we should be aware that the collateral of Greek banks is limited and that its value is decreasing when Greek government bond yields rise. Moreover, in light of recent developments in the increased risk of default of the Hellenic Republic, the governing council may need to assess the quality of the collateral used for ELA purposes including the applicable haircuts.

Mario Draghi (00:13:11):

So, the extreme fragile market and liquidity situation underlies the urgency of making progress in restoring confidence in the Greek economy. It’s absolutely essential that now decisive steps are taken to have agreement with the institutions and restore calm into the financial system. On the program itself, I entirely agree with the remarks made by Pierre Moscovici. On the- especially on the fiscal part of the program uh, it’s quite- it’s essential that agreement be reached on the macroeconomic projections, on the growth projections, so that a reasonable figure for the fiscal surplus can be agreed upon.

Mario Draghi (00:13:55):

And the second point where agreement is absolutely needed and its very, very urgent, is the series of structural reforms. Let me list some of them, because one of them is the independence of the HFSF, is of crucial importance for us. The reforms in product and services markets, again here much more determination is needed. The pension reforms, it’s kind of pointless to have pension laws that are fiscally unsustainable.

Mario Draghi (00:14:25):

The labor market reforms and uh, in general, in general the refraining from unilateral actions. So the outcome of this agreement should be a strong policy package that would produce growth while having a certain level of equity, respect in fiscal sustainability and financial stability. Thank you.

Jeroen Dijsselbloem (00:14:48):

Thank you very much. Uh, Paul?

Paul (00:14:54):

Thank you Jeroen. So, I agree with the remarks uh, made by Pierre and Mario. I agree that the discussions have been [inaudible] good will and more open. I also want to be… make clear that we… there are… very vast differences we’re making in all key areas. I think there’s much progress in narrowing the differences that we take some of the major areas, one by one. Fiscal. On the fiscal, uh, we are in the situation where we don’t have final numbers for 2014, but it’s clear that rather than reaching the target of 1.5, we are probably at best, at balance. Because of backtracking of measures by the previous government, in the second half of last year.

Paul: (00:15:49):

We might even have had a small deficit last year. Now, we have not, the new government has not presented us a revised budget for 2015. We have not been able to have that discussion, but it has said that it wants to backtrack in a number of areas. For instance, on pension reforms, the backtracking amounts, to…uh, if I include uh, the budget to pay a thirteenth pension, to almost 1% of GDP.

Paul (00:16:21):

What, what…On pensions, backtracking, yes. Backtracking on almost 1% of GDP, almost. Uh, altogether, I think that if we, uh, if we just take the proposals that have been put on the table, without the benefit of having seen a comprehensive budget proposal by the government, we think that you will have a deficit of 1-1.5% of GDP, this year, this year. Compared to a target of plus three, without measures. So we are facing a huge gap, a huge gap, between where we are going to come out without measures, um, and where we wanted to be, and we certainly agree that the 3% is not attainable anymore, that’s for sure.

Paul (00:17:09):

Uh, as the two others previous speakers said, there are major backtracking on on on pension reforms, on the fiscal structural reforms that are needed to get us to where we wanted to go over the next couple of years. Pension reforms, tax administration is moving in the wrong direction, and public administration reforms are moving, all three of them are moving in the wrong direction.

Paul (00:17:44):

Uh, so, so we, you know, we need to have that discussion, uh before we can even, uh discuss what is feasible and reasonable targets over the medium term. As others have said, labor market reforms are proposed to be reversed, although the government has not done so, yet. Product market reforms, there are some reversals there already, uh, but there is also a reluctance to go ahead with the framework that we had agreed, uh, for opening up of closed profession. Mario can comment on the financial sector.

Paul (00:18:21):

So throughout these important areas, there are major differences, and I think it’s important, I have to caution you what that would mean from our perspective, is that six months ago, we thought that Greece could go back to, possibly could go back to the market. And there would be no need for new money. With uh, with these, with these programs, with these proposals we have now, there will be a need for very, very significant new money.

Paul (00:18:58):

Secondly, until six months ago, we thought that there would be no need for debt relief. Under the November 2011 framework, agreed with the Eurogroup, we thought that these targets could… were basically achievable given where we were six months ago. If we aren’t uh… if we start deviating, in any notable way, from the existing program, be it primary target, be it privatization, be it the reforms underlying what already is very, very ambitious goals for some things.

Paul (00:19:36):

If that’s the case, we will be looking at the need for very significant debt relief, from Europe also, in order to ensure that this package is, package is sustainable. So, I think, you know, we need to keep this in mind, as we go forward. I do not want you to come back later and say that, that we sort of, jumped a surprise on you, in this regard. What should be done moving forward? Uh, I do think that the process needs to… still needs to improve. We’re still in a situation where our mission chiefs are not allowed to correlate the work in Athens. We’re still in a mission chiefs where our people sit in a hotel room and, , in Athens and not, can’t go to the ministries. It is not efficient. We .. err know, when we did this discussion in the previous four or five years, we always had the mission chiefs and discussions with ministers and their senior staff. Uh, policy level discussion with ministers and their senior staff. Then, it was another round of technical meeting and then more meetings with ministers. We had not one single time through the process with [inaudible 00:06:02] where we had discussions with ministers. It’s not happened.

Paul (00:20:57):

So, uh, there is… it’s, the process needs to improve, uh, so that we can get into negotiations. We are not negotiating, at this stage. I, uh, and I think that is the diff–, also, for the, for the government to be able to move from what is still policies and objective, that are very, very broadly uh, defined and there are not anywhere close to specific action plans. Uh, so I, I think we need to…we need to discuss process also here, how to take it forward. Thank you.

Jeroen Dijsselbloem (00:21:36):

Thank you. Klaus?

Klaus Regling (00:21:37):

Thank you. Thank you. Just two small points to add because there are not mentioned before. One is on the financial sector reform. The proposals that I see are more geared to protect um, indebted households and corporates. They are not here to strengthen the budget of banks and I think that could be a problem for us, given that HFSF money, 37 billion euro was given in the context of the program to strengthen the banking sector. So this could become a problem I think for all of us.

Klaus Regling (00:22:15):

The second point is, just as a reminder um, SMP downgraded um, Greece last week to triple-C and that means that now all the major rating agencies are on this triple-C territory which indicates a real probability of default. The readings are rating reports which are publicly available. It is clear that the rating agencies are following very closely the progress of the negotiations um, the liquidity situation and so on.

Klaus Regling (00:22:47):

Um, and the rating action, we need to remember will also have an impact on the liquidity of banks. Um, and the cost of funds for banks but also for corporates and [inaudible] the borrowers, so it will be detrimental for the real economy. Thank you.

Jeroen Dijsselbloem (00:23:07):

Thank you. Um, Thomas? Could you brief us on the discussion in the EWG?

Thomas Wieser (00:23:13):

Thank you very much. We had a conference call last Wednesday [inaudible]. We were briefed on the liquidity situation, which is getting more urgent, even though it increased [inaudible] as suggested by the institutions very recently passed, which allowed the government to access funds [inaudible 00:23:44]. Secondly on the discussions on [inaudible] which were, had to be held in Paris this time around to escape some other meetings. There was the report that at a technical level the [inaudible] improved, [inaudible] constructive. So I would describe it uh, by saying that the institutions have uh, agreed that the technical understanding of the disagreements has uh, improved.

Thomas Wieser (00:24:25):

Therefore, on timing um, everybody is quite [inaudible] that the pace has to be accelerated significantly. The degree of familiarity has to be increased. Uh, and [inaudible] results need to be produced very very soon. The next Eurogroup is on the 11 May, which essentially is two working weeks away from today. If we work backwards uh, that could imply that agreement between the Greek authorities, if one were to take that as a target which is not certain. But if one works backwards uh, the processes that we need in the euro-working group to prepare the Eurogroup etc. that would mean that agreement needs to be found within a week.

Thomas Wieser (00:25:13):

Agreement means very specified documentation of course. So uh, the conclusion that I would draw is that something has to change possibly, in terms of the process because this is what ministers uh, expect uh, and their parliaments expect, is a very detailed, written technical document and not in a political narrative. So that is uh, the conclusion that I would draw from that talk uh, and where the separate items such as fiscal [inaudible 00:25:55] pensions HFSF and so on are with regard [inaudible] institutions.

Jeroen Dijsselbloem (00:25:54):

Thank you. Uh, Yanis?

Yanis Varoufakis (00:26:03):

Thank you, Jeroen. Thank you, colleagues.

Jeroen Dijsselbloem (00:26:13):

So the liquidity…

Yanis Varoufakis (00:26:11):

Oh sorry.

Jeroen Dijsselbloem (00:26:13):

The liquidity situation uh, because basically you’re the only one who could give us a sound estimate of that.

Yanis Varoufakis (00:26:21):

Thank you, Jeroen. It is our, uh, assessment that the deliberations with institutions have picked up of recent. We are, uh, pleased to report that, at least from our side, it seems as if, uh, a great deal of convergence has been achieved, even though it was not sufficient to reach an agreement, yet. But we are very optimistic and very positive, and wholly determined to make sure that, um, uh, we do our part so that the extra mile is covered within a short space of time.

Yanis Varoufakis (00:27:04):

Let me, just briefly, um, mention some areas of agreement and disagreement. Just to give colleagues flair of the kind of progress that we have made, both us and the institutions. Let me begin with the example of tax administration. It was, um, um, part of the previous government’s, uh, commitment to the institutions that, uh, the tax authority, the General Secretariat of Public Revenues within my ministry, should be given greater autonomy.

Yanis Varoufakis (00:27:46):

And I believe there was worry amongst colleagues, as well as the institutions that our government would want to claw some of this back, to roll it back. Well, I’m pleased to report that not only are we not doing this, but we now have consensus in the government to actually take it further than what the institutions ever asked for.

Yanis Varoufakis: (00:28:02):

We are, um, interested in and committed to now creating a fully independent tax authority. Independent both of political intervention, interference, but also corporate interference. And we’re keen to work with the institutions in order to create the- this kind of IRS-like, uh, separate entity that looks after public revenues.

Yanis Varoufakis: (00:28:26):

And as the minister of finance, I have to tell you, on a personal basis, that I’m very much looking forward not to have such control over public revenues. Also, uh, regarding the independence of authorities such as the Hellenic statistical authority ELSTAT, and the HFSF that Mario, uh, mentioned, I believe it was Mario and maybe Klaus, if memory serves. Uh, let me reiterate our government’s commitment to strengthen the independence of such, uh, bodies, uh, in full compliance with what the institutions and colleagues here around the table, uh, consider to be appropriate. On other issues, I- I just- I will not- I do not propose to go through, uh, very many of them, because this is something for us and the institutions to work out in the Brussels group and so on and so forth. But just- I ju- I just want to give you a flavor of the progress as we see it and the reason why we think that we are, uh, on the right path. Maybe we should be moving forward faster, but we are nevertheless on the right path.

Yanis Varoufakis (00:29:34):

Uh, take the issue of VAT. There is a disagreement of sorts between us and the institutions regarding the emphasis. Our emphasis goes on collection. Let me give you a brief example. Last year on the famous islands of Mykonos and Santorini, we had tourism, economic activity, tourist activity doubled, and yet disgracefully, absolutely disgracefully, VAT collection went down by 30%. This has nothing to do with the rate of VAT. That has to do with the failure of our tax authorities to collect it. So we put more emphasis on- on collection- on the collectability. The institutions put more emphasis on harmonization and looking at different rates, but I have no doubt that in good faith we can work this out, we can hammer out an agreement on this, uh, which I will not now bother you with as to how exactly it will be- it will manifest itself.

Yanis Varoufakis (00:30:30):

On the question of privatizations, I heard Pierre, uh, mention that and- and- and- and Paul mention that there’s been backtracking. I don’t believe that backtracking or rolling back is apt as a description of what we’re doing. After a few weeks of deliberating as a new government, we have now come to a very clear position on this. We are continuing with the privatization drive, only we are resetting the parameters in a way that I think that colleagues, if I was given an opportunity to explain, my se(nse) – my hunch is colleagues would agree with what we’re saying. What we’re saying is that privatizations must happen in a way that, um, removes them from the realm of fire sales, which is what we’ve had in the past few years. So, it is not that we are slowing down privatizations, it is that we want to put greater emphasis not on the sale price, but on things like minimum investment provisions by the bidders.

Yanis Varoufakis (00:31:45):

We want the state to retain an equity, like it happens in many other European countries around this table. We want to have-uh, in case of regional airports, let’s say for example, we would like greater commitment and planning for an integration of, uh, the new activities in these privatized facilities, with the local economies. So, our purpose is to remove the emphasis or to shift the emphasis away from the, uh, just, you know, the- the asking price or the bidding price and placing it- shifting it towards greater developmental, uh, um, impact and the multiplied accelerated- accelerated effects that these will have.

Yanis Varoufakis (00:32:27):

Shifting on very quickly to the question of labor markets. Now, this is where we may agree to disagree with Paul and maybe some others. We believe that, uh, a labor market like Greece’s is not just excessively deregulated as it is, in practice, not so much in law but in practice. But it is a labor market that should all make us particularly worried regarding the degree of informality.

Yanis Varoufakis (00:33:01):

When you have a labor market, which has shrunk significantly due to the recession and on top of that, more than 30% of paid labor is informal undeclared labor, one realizes that standard arguments about deregulation fail to connect with the reality on the ground. So, when we talk about, for instance, a role for collective bargaining, that is not simply a return to what we had before, this is not what we plan to do, but a kind of smart collective bargaining framework, um, not different to the one we have in Germany or in other European countries, uh, hammered out and designed together in association with the International Labor Organization for instance, uh, would help bring about a large number of workers into the formal sector again and therefore strengthen the pension system and strengthen our tax state.

Yanis Varoufakis (00:33:55):

Uh, non-performing loans is a major issue. It keeps the credit circuits from functioning properly. It keeps our export-oriented companies from being able to fulfill orders and to finalize their transactions with, uh, their customers abroad as a result of the failure to secure letters of credit from the banking sector. These are all issues that we’re discussing with the institutions. These are all issues that we want to settle. And which I think we’re making considerable progress in finding common ground with the institutions. But be- uh, let me finish with a couple of, uh, points.

Yanis Varoufakis (00:34:32):

All this, as Pierre very succinctly said, has to be, and I’m sure that Mario and Paul too would agree with, has to be embedded in a dynamically consistent fiscal plan, a dynamically consistent debt sustainability analysis. We are undogmatic about this. We don’t have any fixation about what the primary surplus should be. What we’re concerned about is the method, the method that has been, uh, utilized so far of saying, okay, in 2020, we want a particular debt to GDP ratio, let’s say 120% and now let’s work backwards, and their assumptions about, regarding the growth rate of, let’s say, 3% on average, what the primary surplus must be in 2019, ’18, ’17, all the way to today. And then we end up with a primary surplus, which in our estimation is not consistent with a growth rate, which is implicit, the assumption, for working out this kind of path.

Yanis Varoufakis (00:35:42):

So this is a kind of consolidation trap that we want to avoid. And we want to discuss it with the institutions, the DSA, that actually makes dynamically consistent sense. And this is an area of disagreement so far, but this government is absolutely committed to signing on the dotted line of a fiscal plan that makes sense, to us, and which we can fully commit to. Unlike previous governments, you -you will allow me to say, we are not prepared, prepared to make pledges just in order to unl- unlock liquidity that we do not believe are possible to attain.

Yanis Varoufakis (00:36:20):

And I hope that the- our partners, the institutions, everyone around this table takes this in good faith and recognizes that this is a government that wants to make pledges that it can fulfill. Finally, on the question of liquidity, I’m very much afraid that we are talking about very few days- week, less than two weeks before we have a serious, uh, chance of an accident. And it is our considered opinion that it will be a shame that these negotiations, which in our estimation, are proceeding along the lines that all of us want and which may very easily, uh, in the next few days or weeks, attain an agreement that is mutually beneficial to everyone, uh, be derailed by a liquidity, uh, sourced failure.

Yanis Varoufakis (00:37:16):

Uh, we believe that sufficient progress has been made. And we are determined to put on, uh, to demonstrate constantly our utter commitment to making this negotiation bear fruit, so as to enable the Eurogroup very shortly, even possibly through a teleconference, to make the statement which is necessary in order to create conditions for, uh, relaxing the liquidity constraint.

Yanis Varoufakis (00:37:47):

I shall close Jeroen by saying that I understand the view that only major pressure can progress be made and that includes liquidity pressure. But let me also say that too much pressure, too much duress may cause, can cause a breakdown of a negotiation perfectly capable of yielding a successful agreement. So I urge colleagues to help prevent this by creating a roadmap, both for the institutions and for the Greek authorities for what follows over the next few days and weeks. Thank you very much.

Jeroen Dijsselbloem (00:38:20):

Thank you Yanis. We open the floor to ministers for any comments or questions on the process and the substance so far. Peter?

Peter Kažimír (00:38:50):

Thank you. Unbelievable. This is my feeling, what I heard just now. Okay, formally I would like to start with this that, I would like to thank, I think all we should thank to the institutions and the ESM for their work both in Brussels and in Athens. Uh, it’s true that that our Greek partners have finally started to open up in the talks but honestly we need a quantum leap forward than where it is now.

Peter Kažimír (00:39:36):

Uh, we have agreed in February to have a comprehensive list of reforms by end of April. We don’t have it. Instead, we saw reluctance to corporate, backtracking on some measures adopted before elections and fiscal sustainability is volatile. Uh, personally though last month I refused to the union of pensioners in my country. I refused a proposal of a 13th pension introduction in my country. Why? Because medium term objective, fiscal responsibility, fiscal consolidation in my country. You can pay out additional pension to your pensioners if you have money enough.

Peter Kažimír (00:40:40):

Do we have money enough? I cannot support any agreement with you and at the same time refuse the 13th pension in my country and to just observe 13th pension in your country. And this is backtracking of a measure that, which is, we regret in different ways. So we talk but substance is still missing and so, on this question is if we are still on track to meet our June deadline, this I think is the only question for us. And okay we are ready to help Greece but if Greece doesn’t want our help and conditions accompany maybe the time has come to talk consequences. Thank you.

Martin (00:42:01):

Thank you Jeroen. As we all know, there is very little time left so we need to, have to make the best use of it. It is now important to get rid of the remaining obstacles to represent talks. The institutions need access to buildings and information in Athens both at the technical and the political network. Symbols can be important, but this is important that we must concentrate on results not symbols.

Jeroen Dijsselbloem (00:42:33):

Our colleagues, let me try and draw a conclusion possibly that is going back to what we agreed on the 20th and 24th of February where we were quite clear that the program could be, would allow for some flexibility if it would remain within the key targets of the program. In other words the program had to stay on track. We are now very close to the end of April and my understanding from the institutions even though Yanis is a little more optimistic is that very very little progress has been made. Um, I don’t think it’s useful to set new deadlines. I think we have to hold the energy in uh, to work on an agreement as soon as possible within, fully within the agreement we had, the statement of the 20th of February, Having said that I think the way the process is going so far we cannot continue.

Jeroen Dijsselbloem (00:43:43):

So I will talk with the institutions and with the Greek governments on how to redesign the program. It has been fragmented, it has been inefficient, and the institutions have simply made it clear to us just now that the work cannot be done and an agreement will not be reached if we continue this way. So the process has to be redesigned to pick up the pace.

Jeroen Dijsselbloem (00:44:11):

On substance, I think we have uh, a reasonably clear picture of what the key issues are. Um, I feel that uh, it’s going to be difficult to reach an agreement but I also feel that we have to. Uh, and I think that hard work will have to be put in. I will not be optimistic about reaching an agreement before the next Eurogroup so therefore, I will refrain from talking about new deadlines or aiming for an agreement before the next meeting, because as Wieser said we would need an agreement, on a technical level within a week and where we are now I don’t think that is reasonable unless miracles happen. So uh, after the meeting I think it’s important that with the institutions and the Greek government we talk about redesigning the process to get it at a higher level and a higher pace. Um, that is [inaudible]

Wolfgang Schäuble (00:45:23):

I just want to understand what does it mean uh, to redefine the progress? What does it mean? the process? Only the process? That means that uh, we should at least, that something should happen that we had agreed it should happen month before. What does it mean? Redefine the process?

Wolfgang Schäuble (00:45:50):

I think [inaudible] at seems [inaudible] As long as there is no discussion [inaudible] as long as there is no discussion, as long as there is no access to the ministries the message to the Greek people is in the wrong direction. [inaudible] It’s not true to say we have not moved in the right direction. Now people fast in the wrong direction, that is the situation. [inaudible] Therefore since I got it from Yanis that uh, the liquidity situation is urgent, I think we should uh, think about what’s going to happen because we will not have a solution and it is fair and I can’t, I can’t imagine how we’re going [inaudible] solution.

Jeroen Dijsselbloem (00:47:10):

Um, on process what has happened and this was a concession to the Greek government, we have uh changed the process which traditionally takes place with the troika institutions going to a capital and working there in a very concerted and concentrated manner with the authorities in the ministries with ministers uh, and on request from the Greek government we have had a fragment process with some talks going on in Brussels, some work being done in Athens, very difficult, little access certainly in the beginning and I think that it is key to go back to a very comprehensive approach uh, allowing access in Athens. And having the main talks in Athens without the distinction we’ve tried to make so far on request of the Greek government between negotiations and technical work.

Jeroen Dijsselbloem (00:48:13):

This has to be brought together uh, the only way we can get this process going. Um, I think we still should put in, all of us, the effort that we can to find this agreement. It will take a lot of steps from the Greek government, absolutely no doubts about that and whether they are willing and able to do so is to be tested within the next days and weeks, as time is running out. Any other comments at this point?

Hans Jörg Schelling (00:48:53):

[crosstalk] [inaudible] I agree with Peter and his message to Greece. I agree with Wolfgang but maybe the set up is wrong and we lose too much time with these negotiations. All the statements coming from Greece um, are little bit like a deja vu. So maybe next time we can, like in the video of the messages you gave uh, two months ago. So we have the problem that you say that the liquidity problem is coming up in the next two weeks. The next ECOFIN is [inaudible] in three weeks or [inaudible 00:49:38] how should we solve this problem? If it necessary to make a new set up to bring it to progress, then it’s ok.

Hans Jörg Schelling (00:49:38):

But uh, we lost so much time in the last weeks and months that I cannot believe that it is possible with changing the set ups. If it is possible to change the set up, with changing the set ups does it make progress or a solution? And uh, as I told in an interview, that we cannot make a decision because we have not the right information. We have no documents. Uh, you called me a liar, so I have to present this in an Austrian newspaper so this is not a problem for me uh, to make this discussion about fact.

Hans Jörg Schelling (00:50:27):

We don’t know exactly what is the financial situation of Greece, we don’t know uh, which part of the list of report should be canceled or continued. What is the time starting with this report and uh, therefore it’s, in my opinion, not possible to follow this set up and this way which we have, since maybe half a year.

Hans Jörg Schelling (00:51:00):

So please can you tell us what you plan to bring in the next 2, 3, 4 or 5 days to reach that what Thomas said, to bring up uh, a statement which is necessary for the next discussions on the political level in between the next week. Uh, if you look at the progress of the last month I cannot believe that its possible in between the next weeks. So that’s for us in the political discussion a big problem.

Jeroen Dijsselbloem (00:51:37):

Thank you. Pierre come in.

Pierre Moscovici (00:51:40):

Thank you Jeroen. Um, first of all I’d like to say from the outset that uh from our side we would really like to be able to do everything that we find a solution uh, with Greece. A positive one.

Pierre Moscovici (00:51:58):

But I am very worried from the way the discussion goes today uh, I have carefully listened to the three institutions and they have listed all the problems that are still there, they are not new and that are not being solved.

Pierre Moscovici (00:52:17):

And I’ve heard our Greek partner Yanis telling us what he told us ,but apart from the issues that deal with the collecting taxes, which we all would welcome I’m sure, I haven’t heard not a single point where I felt that uh, he was ready to move in the direction that we are expecting. And as Wolfgang Schäuble said correctly, I also think we are moving in the wrong direction instead of moving in the right direction.

Pierre Moscovici (00:52:55):

And I’m very worried about that. Um, on top of it its really unfortunate that there seems to be roll back on certain measures. I say it seems because it’s very difficult for us in a distance to really appreciate the situation in some cases and on some issues and that’s obviously contrary to our 20th of February agreement.

Pierre Moscovici (00:53:19):

Now if that is so, I’m afraid that it’s not enough Jeroen, although I support your proposal, it is not enough to change the way we do the negotiation. It’s obviously unfortunate that there is no contact at political level and at administerial level but that alone will not do it.

Pierre Moscovici (00:53:40):

And I am very worried of what we’re going to say when we walk out of this room if we just say that we changed the procedure because then it’s the credibility of the whole negotiation that is put into question. And the credibility of the whole Eurozone. And last but not least, I think we have a time issue. The liquidity problems of Greece are going to happen in the next two weeks as far as I understand, and to find a global agreement in our framework will take more than two weeks uh, for sure because we have not yet received the detailed plan from our Greek friend.

Pierre Moscovici (00:54:24):

And even if we were to receive it in the next couple of days, I understand that it would take much more time to find eventually an agreement on it. So I think we have here a timing issue that we have to re-discuss it together. So I’m afraid I’m not offering a lot of solutions but I’m asking quite a few questions, but I think the credibility of the process needs to be really looked at.

Jeroen Dijsselbloem (00:54:50):


Luis de Guindos (00:54:56):

Uh, thank you Jeroen. Just one question. I think that my perception from today’s meeting is that there is a big gap between expectations and the reality. Uh, and I think that’s when we have to face a situation with such a gap, I think that it is truly important to handle expectations and communication. So I think that uh, well I fully agree with you that to set new deadlines perhaps is not wise, but I think that we need something to say, in our communication.

Luis de Guindos (00:55:38):

I don’t know if you have prepared some messages because well, we are running out of time. We have a very short period of time and I think that we have to try to do our utmost. That in order, uh, to find a solution but I don’t know what message we can convey today after this meeting.

Jeroen Dijsselbloem (00:56:05):


Dušan Mramor (00:56:05):

As I’m listening to the explanation where we are after February’s agreement, what we would do in next months until April, I just cannot conclude anything else but that there is no viable plan uh, set in motion here. And uh, its [inaudible] according to my assessment it’s not the problem of liquidity, it’s the problem of solvency of Greece and there’s no plan how to make Greece solvent again. It’s no way that I can persuade Slovenians, which are the most exposed to Greece, that they would put additional effort into helping Greece getting out of this situation. So actually I think we should talk about plan B here, we had so many months, two months to solve a question. With a few days now, a few weeks, I don’t see how we can get there.

Dušan Mramor (00:57:27):

I know we didn’t want to talk about Plan B because we really wanted, including Slovenia, wanted this would be resolved the way that we planned together, but now I don’t see [inaudible] from February on.

Jeroen Dijsselbloem (00:59:09):


Michel Sapin (00:59:10):

Foreign language [French]

Jeroen Dijsselbloem (00:59:12):

Thank you.

Pier Carlo Padoan (01:03:11):

Thanks Jeroen. Actually Michel anticipated many of the things I wanted to say so very briefly let me just stress a few points. I just I have one point only and the point is let’s not fool ourselves. Let’s not try to pretend that nothing is happening. Here the framework which was agreed in February is simply collapsing. Uh, the framework we had agreed in February was that Greece needed to have a short term, few months, effort which was categorised under the extended program because this was needed for its own sake.

Pier Carlo Padoan (01:03:53):

But this was also needed to move to the next stage where the deeper structural issues that Greece has to face would be tackled with a medium term approach. Now we are risking to fail on both fronts. Uh, we hear that time is short.

Pier Carlo Padoan (01:04:16):

Liquidity is running out in spite of the huge amount of liquidity that, as Mario just reminded us, was given to the country. In proportions that are unprecedented in the Euro zone. So that amount of liquidity tells a lot about the time that has been lost. So I am deeply frustrated by the fact that we are facing a situation which is very difficult to communicate by. Let’s not fool ourselves without [inaudible] this is not understood.

Pier Carlo Padoan (01:04:49):

Unless we dramatically change gear both in process and in content. It’s not about completing the reform program in two weeks. It’s about saying that this is a fresh start about issues that have to deal, first of all with the welfare of the Greek people. But then also with the obvious fact, obvious to me at least, that you need at the same time build a structural reform program which boosts growth and enhances welfare and consistency with [inaudible] figures in terms of fiscal and monetary.

Pier Carlo Padoan (01:05:23):

Otherwise, it doesn’t work. Let’s not fool ourselves. So this is just to share my frustration and I apologize to colleagues about this. But we are not, we do not have the luxury of st- we are losing time.

Speaker 19: (01:05:45):

Just a short remark. I think it’s fairly clear that in terms of the process something fundamentally is wrong. Uh and that we need to change that is obvious. Now I think [inaudible] uh changes in the process. [inaudible] one cannot be created from the other. Uh, the content [inaudible] February agreement, I think it’s necessary for the Greek economy but it’s certainly also necessary for the credibility of the monetary union. I think any kind of [inaudible] in terms of process and content will be very, very [inaudible 01:06:24].

Jeroen Dijsselbloem (01:06:18):

Absolutely. Um, Edward?

Edward Scicluna (01:06:33):

I don’t mean to be dramatic because it is dramatic enough. Um, I think we’re on such a self-destructive path that I can’t see ourselves going out there meeting the media or [inaudible 01:07:03].

Edward Scicluna (01:07:03):

Find a solution today because uh, just saying May and then June, I don’t think there’s going to be any change. So there aren’t going to be any solutions or miracles as some people have referred to. They have to happen in this week.

Jeroen Dijsselbloem (01:07:20):

Okay. Rimantas?

Rimantas Šadžius (01:07:31):

Could I remind you that we started in February I think from discussing three trajectories of Pierre’s Moscovici and I was the one that – who said that, well the most likely trajectory is the third one, things go as they go, without any progress. Until now we see this. Uh, to find out the way uh, out of the situation, I think we also should recall the first message that was um, said by Michel Sapin, I also recall this in February. The first principle [inaudible] that we should respect the will of Greek people. I think today we have a full ground of changing this attitude.

Rimantas Šadžius (01:08:31):

I should tell you that Lithuanian people that I’m representing didn’t vote for the present majority in the Greek parliament. We even had no chance to say any argument during the election campaign so from this point of view uh, we have no obligation to support the measures that were proposed or given as promises uh, to the Greek people. And I think uh, that we have a full right in Lithuania to look critically at these proposals.

Rimantas Šadžius (01:09:08):

Uh since Paul has said that uh, well um, a huge financial assistance is looming some time in the future, I think uh, for negotiating this huge financial assistance, I also will have to explain the measures that have been taken, or have been planned or have been realised or not, uh in Greece.

Rimantas Šadžius (01:09:31):

And here I recall first the example that was given by Peter, the 13th pension that would amount to 1 percent of GDP, this assessment of IMF, uh if I recall uh, correctly in Lithuania we have overall 12 pensions of 8 percent of GDP. Which means that the pension system of Greece is unsustainable.

Rimantas Šadžius (01:09:56):

Simply it is unsustainable. The second example, the second problem that was uh, widely discussed around this table was uh, the question of minimum wage. It was hidden somehow where I think they haven’t yet made the decisions uh, but still discussing it. To my mind and to mind of many people that I talk around in Lithuania, it would be crazy to increase to that extent the minimum wage when you have uh, 30 percent of uh, unemployment plus 30 percent of gray employment in your country as was said by Yanis.

Rimantas Šadžius (01:10:41):

Um these two measures are the most evident things, the most evident points for discussion in the Lithuanian society if uh, further assistance to Greece from ESM would be discussed. People don’t know what the structural balance is, what the private [inaudible] balance is, what the debt burden [inaudible] it is something abstract. These two things are very concrete. Very comparable between countries especially that we joined the Euro, Lithuania [inaudible], quite recently and now everyone in Lithuania compares how much we earn compared to other countries.

Rimantas Šadžius (01:11:25):

Um, the situation that we do have in Greece now tells me that this country lives not by its means. And what is happening now, I would not call this tragedy. Uh, the lack of liquidity. I would call this natural economic adjustment. So this third trajectory uh, to-to it could be sustainable. This is also Lithuanian experience. We have the same situation in 2009 where we lost one-third of taxation income quite immediately after the uh, financial crisis started.

Rimantas Šadžius (01:12:06):

We managed somehow to pay what we had to pay from our resources, then the necessary indispensable decisions, our own sovereign decisions were to cut expenses. We did this. We did this not very simply, now we have some decisions in the constitutional court.

Rimantas Šadžius (01:12:29):

We managed to construct a quite complicated legal mechanisms of compensating people in the future which is always the case, which is always the possibility. Another possibility I think for those couple of thousands, which is many, civil servants that Greek authorities consider, that were fired not justly. I think this could solve the problem in the future. But all these decisions, all these decisions should be taken by Greek authorities. But here I think uh, the sovereignty of this country, it should be respected but we, the rest of the Eurozone, we also have a say.

Rimantas Šadžius (01:13:14):

We also have a say because what is happening there affects our countries uh and there is no democratic counterbalance for that. Because in a single separate country, if the government behaves not the way it should, uh, there is always people who can elect another government. We have no such possibility, but I think we have a possibility and we should use this possibility today to tell our Greek friends that we care of- very much about.

Rimantas Šadžius (01:13:54):

We wish the best success for them, but we can and we should give an advice for them: to undertake measures uh, are absolutely necessary. Of course they will be living for some time, I would uh, I can see this as quite, quite a long time, they will live on their own because uh, I can’t see any possibility to conclude the agreement very soon.

Rimantas Šadžius (01:14:29):

But I would strongly uh, agree with proposal of Jeroen. That first, that we should say okay enough is enough. First, we change the mode of discussions. And uh, we should make the proposal for the Greek authorities on behalf of the rest of the Eurogroup to behave differently and to consider very seriously uh, the steps forward.

Rimantas Šadžius (01:14:59):

Um, if we get this first result in terms of procedure, this could show us the sign of hope to get real results in discussing the program. Um, as a precondition for getting the final economic financial agreement with Greek authorities. But, uh, on the other hand, our advice would be uh, for Greece to start living on their own. To start not relying on external assistance all the way along and uh, then we shall see what can be undertaken solidly by all the Eurozone countries to improve the situation.

Rimantas Šadžius (01:15:48):

But the basics should be done uh, by our Greek friends. And this is our friendly pressure. Please consider this as our friendly pressure. Thank you.

Jeroen Dijsselbloem (01:15:59):

Thank you very much [inaudible 01:16:05]. Um, Yanis before I give you the floor, I think you’ll find the Eurogroup once again [inaudible] very critical on what’s been going on. Um, all of us also from our domestic political environments and the efforts that all these ministers have done in these last couple of years in their countries and also in providing support to Greece, all of the ministers have to go home and explain why we are still supporting this process. Why do we still have confidence in it? Why would we still be prepared to continue supporting Greece? And we all want to because the Eurozone, working together in Eurozone is to all of us very important.

Jeroen Dijsselbloem (01:16:48):

You have to realize that there have to be results in the short term because the process is coming to an end. I think that’s a signal that all our colleagues are giving you.

Yanis Varoufakis: (01:17:04):

Thank you, Jeroen. I appreciate the difficulties that each one of us faces when we go back home to explain the present circumstances.

Yanis Varoufakis (01:17:20):

I was struck by a certain disconnect between the atmosphere as I understand it in the negotiations, the Brussels group in Athens. Between our authorities and the institutions and a certain degree of hostility which I encountered here today. Hostility which I hope is going to simply dissipate and disappear very soon. I accept my Lithuanian friend’s friendly pressure, I do believe that we need to be pressurized.

Yanis Varoufakis (01:17:59):

But I believe that all of us need to be pressurized into coming to a comple—a final conclusion to this saga. Let me reassure all colleagues that this government is not going to contemplate even being dragged into the indignity of primary deficits again. We will do whatever it takes, we will introduce whatever measures it takes, in order to ensure that we do not sink into primary deficit.

Yanis Varoufakis (01:18:33):

Let me also remind you colleagues that Greece is not a country that has been idling around over the last five years doing nothing in order to help itself and to deal with its major problems. We are the champions of fiscal consolidation in the era of peace time. Our reduction of structural deficit has been monumental. Of course there were many social costs and economic costs as you all know.

Yanis Varoufakis (01:19:08):

I don’t need to go into this again, but just hearing the various views around this table today someone who doesn’t know the history of the last five years will be mistaken into thinking that Greece has been sitting on its hands doing nothing. There has been wasted time since the 20th of February and 24th of February Eurogroup agreement. Our idea of how to implement that agreement, and it was one as Jeroen knows well, that we tried to communicate, was very simple.

Yanis Varoufakis (01:19:47):

What we needed as a Eurogroup, as the institutions, as we the Greek authorities was to complete essentially a review very quickly, in a few weeks, couple of months at the most, a review what failed to be concluded by the previous government in a much longer space of time, and under very difficult circumstances.

Yanis Varoufakis (01:20:11):

Let me remind you colleagues that we were elected after a bank run had already begun, speaking of liquidity. Our idea was that we should agree on a sustainable dynamically consistent fiscal plan and four or five major reform bills that could be pushed through parliament by now or by May. So as to show some action to our peoples, the Greek people, the Lithuanian people, the Slovak people. Everyone.

Yanis Varoufakis (01:20:44):

Instead, we embarked upon, and I understand the reasons, there are institutional reasons for that, a full and comprehensive review. Time and again, the Greek government attempted to table very specific policy proposals. But time and again, we were told that this must await the complete and comprehensive review.

Yanis Varoufakis (01:21:08):

So my Austrian friend will permit me to say, that it is not true that we did not table proposals. Some of them were actually, against our will, leaked to Financial Times. Another colleague spoke of a deja vu. We have that sensation too. The idea now of returning to the failed process of the troika where technocrats visit ministries and discuss with ministers. That was a model that was utilized in the past which made the Greek population, independently of what we may want as ministers or as the cabinet, made the Greek population very hostile to this process and this is why we agreed on the Brussels group and Athens group um, dual mechanism.

Yanis Varoufakis (01:22:01):

I believe that the Commission, from what I hear from them, was very much in support of this mechanism. I do also believe that it is right that in the European Union ministers should be negotiating with ministers and not be interrogated by technocrats. I believed that we had settled this. As far as the efficiency of the process is concerned, I shall come back to this in one second. I won’t be long Jeroen.

Yanis Varoufakis (01:22:33):

I just want to mention a couple of points. Firstly to my Slovak colleague, I understand your point about your pensioners but let me tell you that the direction of change matters perhaps matters more than the absolute level. It is one thing to deny pensioners pension rights, it’s quite another to have had what we have had, a sequence of pay reductions.

Yanis Varoufakis (01:23:00):

Similarly, with a minimum wage, we would never imagine of increasing the minimum wage now if it hadn’t been reduced to the extent it has. But even that we have put on the back burner. We are prepared to leave this in abeyance until we negotiate. On the question of liquidity, a colleague mentioned that, suggested or opined that the liquidity problem we have is a natural economic adjustment. Let me beg to differ colleagues. The Greek state lives within its means.

Yanis Varoufakis (01:23:34):

Has been doing so for a year now. We have a small but nevertheless positive primary surplus. The liquidity problem that we are facing is not due to the fact that we are over–living beyond our means, it is due to the fact that we are in a program which has certain redemptions, repayments particular to the IMF during these months, that have been scheduled.

Yanis Varoufakis (01:23:59):

And certain scheduled disbursements which of course have been suspended for reasons that you all know. We have been meeting those repayments out of the flesh and blood of our own state’s liquidity. This is why we have a liquidity difficulty at the moment. We have been meeting, we’ve been scraping the bottom of the barrel of our state’s resources in order to be meeting repayments to the IMF and to other creditors which were meant, according to the program, to the previous program, to the existing program, call it what you might, were meant to be covered by disbursements.

Yanis Varoufakis (01:24:36):

If you annualise the repayments that my ministry has made to creditors over the last two months, you will come to an astounding sum of 14.2 percent of GDP having come out of the fabric of the Greek state to meet those repayments. But without, simply because I do not want to carry on along those lines and burden you further, let me say that we can make this work. That Plan B should not be mentioned. It is highly and immoderately anti-European even to bring about this discussion.

Yanis Varoufakis (01:25:21):

My dear colleague from Slovenia should know that it is not in the interest of his citizens that we even discuss this at the moment. I reject such a discussion, our government intends to do what it takes in order to remain within the Eurozone, it is a discussion that we are not accepting to have as a matter of principle and as a matter of commitment to the benefits and to the interests of the average European.

Yanis Varoufakis (01:25:50):

We can move very quickly along the lines that were already suggested. Let’s agree on a dynamically sustainable fiscal plan, four or five bills that can be introduced in the next few weeks and move on. Thank you, colleagues.

Jeroen Dijsselbloem (01:26:09):

Um, colleagues I’m not going to open the floor for a second round, if you would agree. Uh, I want to ask Yanis basically three things, I would like him to respond positively, uh, to give us, uh, some perspective of the process in the next days and weeks.

Jeroen Dijsselbloem (01:26:27):

First of all, I think we can all reconfirm that the agreements of the 20th of February and the 24th are still the framework [inaudible] and [inaudible] there is absolutely no deviation from that.

Jeroen Dijsselbloem (01:26:38):

It also, means, for example, we still [inaudible] that one aspect of backtracking on a number of measures, can and will be done, uh, because they have to be tested on economic principle, et cetera, by the institutions as agreed on 20th, uh, of February. So, that’s point one. Point two is, uh, I would like a confirmation from Yanis that the Greek government is open to redesign the process because the way that things are going now, fragmented in different places, uh, the tremendous struggle to even get data, et cetera, has to stop.

Jeroen Dijsselbloem (01:27:19):

And we can talk details, uh, outside of this meeting, but we need a certain and comprehensive approach to the process. Uh, thirdly, I’m worried about what you say about the fiscal plan and the number of, a couple of reforms. We agreed from the beginning, and this is crucial to all of us, that there has to be a comprehensive deal on what should be put in place in these four months till the end of June, to have a chance of a positive conclusion with a comprehensive package, not just a couple of reforms.

Jeroen Dijsselbloem (01:28:07):

I want to make sure that there is no misunderstanding there, because otherwise, we’re trying to get to different points. All of us are trying to work towards a comprehensive deal and you are talking about a fiscal plan and some reforms. So please, can you respond on the three issues I raised.

Yanis Varoufakis (01:28:31):

I take it, do you want me to respond now? On the question of process, we are quite happy to discuss a revamping of the process in a way that makes, uh, the convergence more likely, but I must insist that the old ways of the troika visits in Athens, uh, have had their day. At least that is what I believe my mandate is from my prime minister and from the Greek government. I also believe that this was the view of the European Commission and maybe we can be enlightened on this.

Yanis Varoufakis (01:28:31):

Secondly, on the question of, uh, backtracking, we are committed, during the negotiation not to make any moves that will jeopardize the negotiation. Our understanding of backtracking may be, of roll, uh, back or of rollback as it’s also called me be quite different. We don’t believe, for instance, that canceling pension reductions, very rapid pension de- reductions in the middle of this crisis as we speak constitutes any kind of rollback, but we are not going to move on until the negotiation has, uh, been completed, we will respect the process. Um, and the final question was?

Jeroen Dijsselbloem (01:29:50):

Working towards a comprehensive-

Yanis Varoufakis (01:29:53):

Oh yes, yes, of course.

Jeroen Dijsselbloem: (01:29:53):

… instead of, uh, a couple of reforms.

Yanis Varoufakis (01:29:55):

Of course. By the way, I didn’t say “couple”, I said four or five reforms bills that go through parliament. Um, Jeroen, we are thoroughly undogmatic on this too, we’re very happy to go along with the comprehensiveness of the review but in order to unlock the deadlock, as an interim suggestion, we are not insisting on this, it is just a suggestion.

Yanis Varoufakis (01:30:20):

I’m sure that the institutions and most of our colleagues here would agree that there are a number of reforms that are urgently needed in Greece and I think we can agree on what these are, we have a common ground of this. Why not, while the comprehensive review is continuing, agree on three, four, five such reform bills that can be pushed through parliament in complete agreement with the institutions while the comprehensive review is proceeding so as to expedite the process that would lead to the conclusion of the comprehensive review? Now, if colleagues are not, uh, enthused by this suggestion… Um, as I said, this is not an insistence, it’s a suggestion, the purpose of which is to open up possibilities.

Jeroen Dijsselbloem (01:31:08):

I’m sorry, um, um, but listening to you on all three issues, uh, I don’t think we’re there. We have, uh, maybe a misunderstanding, uh, maybe we simply disagree but there is not enough grounds, uh, on three issues. First of all, there cannot be a different understanding of what backtracking is. So I think it has to be agreed that there will be no reversal of measures or new measures already put in place which, uh, damage the fiscal position, which damage the economic indicators in the financial sector or the financial stability in the financial sector.

Jeroen Dijsselbloem (01:31:43):

There has to be clarity on that. Secondly, yes, we do have to revisit how we designed, uh, the process, uh, and you will have to be undogmatic on that also. I’m not going to accept that we go out this room, you saying, “ah, well, we think, uh, we don’t want to do it the way it was”. The way it has been done in the past has proved to be quite effective, and the way we’re doing it now is not effective at all.

Jeroen Dijsselbloem (01:32:10):

So, uh, I will need also, uh, an undogm- undogmatic approach there. And thirdly, um, all the approach of the comprehensiveness, you have again and again said, uh, and needed for a part deal, let’s do something first. And again and again, we’ve said, we need to have an agreement on the comprehensiveness on the whole issue. So we know what we can expect from each other over this, this period of extension. So, um, please, I need a little more responsiveness on what we’re saying here.

Yanis Varoufakis (01:32:55):

On the comprehensiveness issue, as I said, it is a mere suggestion. If, uh, colleagues believe that we should put everything in abeyance until the whole process is complete, we will go along with that. On the question of backtracking, we’re quite happy to accept that until the negotiation converges to a complete agreement, there will be no backtracking as you defined it. We have a different view of what a rollback means, but that is simply at the realm of interpretation.

Yanis Varoufakis (01:33:37):

On the question of the process, I want you to clarify something for me. Are you putting it to me that it is incumbent upon the Greek government to accept the return to the original troika process as it was being, uh, implemented and as it unfolded prior to our election?

Jeroen Dijsselbloem (01:34:03):

What I want is, uh, for the process which is now fragmented on different tables and different places in the next couple of weeks to come together in a comprehensive mode, and that’s the only way we can get it done. I’m absolutely convinced. Uh, the details we can discuss outside this meeting with the institutions who have a role, [inaudible] you and I, on how to get it done. Uh, I am absolutely sure the way we’ve done it so far, uh, which we took into account your objections to the old way, that the way that we’ve tried it the last couple of months does not deliver. And also, it has to do, of course, as many of the colleagues have said with political substance, but I’m convinced that it also has to do with way, the way we design this process.

Yanis Varoufakis :

Mm-hmm [affirmative]

Jeroen Dijsselbloem (01:34:47):

So we don’t have to agree now on the details-… I need an open attitude from your side to look at the process again to get it done because as you’ve said and many colleagues have said, them time squeeze is impossible. If the liquidity situation is as worrisome as you, uh, indicated and, uh, if we are at the process where we are, it’s going to be a hell of a job to bring those two together before it goes wrong. And therefore I need from the Greek side, uh, to do whatever it takes in terms of process to, to get, to get out of that squeeze, it is the only thing I’m asking. Um, and I see by your attitude that you have that openness. So, colleagues that brings me uh, I think [inaudible 00:09:31] Pierre wants-

Pierre Moscovici (01:35:36):

I just wanted to talk to you on that last point, the question is not to go back to where we were before [inaudible] elections process now [inaudible] technical and policy questions [inaudible] cannot be fragmented [inaudible]. We find new ways that are more efficient than [inaudible] we are doing now [inaudible] absolutely fundamental.

Jeroen Dijsselbloem (01:36:11):

Thank you. That colleagues brings me to communications outside, after this meeting. I think we need to find a balance between a realistic statement where we are in which there also are elements of uh, concern and urgency and stressing the need to pick up pace. Find a balance on the other side and not creating a crisis atmosphere outside this room but we are very worried among ourselves, we’ve made that very explicit. I don’t think it’s helpful for the Eurozone and certainly not for Greece if we create a crisis atmosphere after this meeting. But I will in my press statements express the concern that we have over the progress being made, the situation in Greece as time moves on and the [inaudible]highly needed progress, the sense of urgency that we all felt. Um, along those lines I will communicate uh, and I would ask you to do the same.

Jeroen Dijsselbloem (01:37:24):

Over to your thoughts and reactions. [crosstalk]

Yanis Varoufakis (01:37:25):

Jeroen might I? I just wanted to ask you that besides uh, expressing concern which of course we all share, whether you’re willing or planning to express that, as we heard at least from the institutions uh, that progress has been registered in the discussion so far between the Greek authorities and the institutions.

Jeroen Dijsselbloem (01:38:04):

We have to distinguish that over the last couple of months, there has been very little progress, some have even said there has been more moving backwards than moving forward. Yet, I also recognize that the last couple of days or this week I’ve heard some more positive things. So with that distinguishment uh, I can work, but two months is a long time. Uh and that time has overall been lost. So you’re right, the last couple of days, at least I heard, some more positive signals of constructiveness, moving forward on a couple of issues but the general picture is still two months lost. So there also there’s a balance.

Jeroen Dijsselbloem (01:38:49):

Um I think we will stop here colleagues and all of us will have to do as much as we can to manage the situation to get progress [inaudible] accepted, necessary from [inaudible] the Greek side.

Jeroen Dijsselbloem (01:39:09):

Um, we will continue in two minutes. [crosstalk]

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