Greece Racing the Clock to Appease Euro Zone Ministers

As Greek government officials scramble to identify sufficient spending cuts in its budget in order to appease skeptical European Union (EU) officials, the country’s finance minister has charged that some nations in the currency bloc want Athens to leave.

Greek finance minister Evangelos Venizelos said those who criticize his country’s commitment to fiscal responsibility are playing with fire and suggested that some EU nations would like to kick Greece out of the euro zone.

There are now powers in Europe who are obviously playing with fire because they believe ... that not all requirements will be met, and who may even want Greece out of the euro zone, Venizelos told reporters in Athens.

At stake is a new 130-billion euro ($170-billion) bailout from the EU and International Monetary Fund (IMF) which Athens desperately needs to stave off default and bankruptcy. Although the Greek parliament just approved a new drastic austerity plan designed to slash spending, many European mandarins remain unmoved by Greece’s promises of reform.

The new austerity envisions 3.3-billion euros ($4.3 billion) in additional cuts.

Greece’s next payment on its debt is due on March 20.

A crucial conference call involving Euro zone finance ministers is scheduled for later on Wednesday to hammer out outstanding concerns.

Cynicism towards Greece abounds across Europe.

Germany’s finance minister Wolfgang Schäuble complained to a German radio station: I am also not yet sure that all political parties in Greece are aware of their responsibility for the difficult situation their country is in,” adding that “we are not going to pour money into a bottomless pit.

At least one prominent German has explicitly called for Greece’s expulsion from the euro zone.

According to reports, Franz Fehrenbach, the chief executive of German engineering and electronics giant Bosch, told a local magazine: This state [Greece] with its phantom pensioners and rich people that don't pay taxes, a state without a functioning administration, has no place in the European Union.

Reuters reported that EU sources said some financial officials in the currency bloc are considering a plan to delay all of part of the new rescue package for Greece – and still avoid a disorderly Greek default.

Some EU officials reportedly believe that even if Greece fully implements its austerity program – a doubtful event in itself – Athens would still not be able to match deficit targets spelled out by Brussels – namely, reducing debt-to-GDP to 120 percent by 2020 from the present 160 percent level.

There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to, an unnamed EU official told Reuters.

They'll discuss the options. There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they've held elections.

Separately, the leader of Greece’s conservative ‘New Democracy’ party, Antonis Samaras, who previously has rejected austerity measures demanded by the EU, now promised in writing that if he is elected the next prime minister he will abide by the stringent budget cuts recently passed by parliament.

If [New Democracy] wins the next election in Greece, we will remain committed to the Program's objectives, targets and key policies [of the austerity plan], he wrote in a letter to international lenders.

However, Samaras also added that some “policy modifications” might be required, adding to the uncertainty.

Prioritizing recovery along with the other objectives will only make the program more effective and the adjustment effort more successful. Therefore ... policy modifications might be required to guarantee the full program's implementation.”

Samaras is widely expected to win the next election, which may be held as soon as April.