Europe warns Greece no change to bailout terms
(BRUSSELS) - European leaders want Greece to stay in the eurozone but partners will not change their bailout deal, the head of the EU executive said Wednesday while pledging investments to nurture growth.
"We want Greece to remain part of the family, of the EU and the eurozone," said Jose Manuel Barroso as he outlined a new push for growth across the eurozone on the day Athens set repeat elections for June 17.
"But the ultimate resolve to stay in the euro area must come from Greece itself," Barroso said.
"There is no way of changing the commitments taken by Greece and also by the other 16 euro area member states."
In Berlin, German Foreign Minister Guido Westerwelle issued a blunt warning to Greek voters, indicating that the next election could be a referendum on their euro membership.
"The Greek people should know what they are voting about. It's not about party politics, but about Greece's future in Europe and the euro," Westerwelle said in a statement.
"We hope and also at the same time expect that everyone in a decision-making capacity in Greece is aware of his responsibilities," Westerwelle said.
He reiterated that Germany felt "solidarity" with the Greeks but that "solidarity is not a one-way street".
Amid deep uncertainty over Greece's future, there is no guarantee that the second vote will produce a viable government, after May 6 polls handed a majority to anti-austerity or anti-European Union parties.
Syriza, the main opponent to the deal reached with the EU and the International Monetary Fund, is currently tipped to win the biggest vote.
Meanwhile, news that about 700 million euros ($894 million) had been withdrawn from Greek banks on Monday raised the stakes for all eurozone partners, amid fears of contagion hitting banks in Spain especially.
European Central Bank president Mario Draghi said the bank's "strong preference" is for Greece to stay in the currency club.
The head of the Eurogroup of finance ministers, Luxembourg premier Jean-Claude Juncker, also insisted this week that eurozone governments had an "unshakeable desire" to keep Athens in the single currency.
IMF managing director Christine Lagarde, while admitting that an exit is an option that would require contingency planning, said that two years of pain for Greece would come to nothing if political differences won the day.
"To throw all of this away because of profound political disagreements, it's really a shame for the Greek people," she said.
After the first talks between German Chancellor Angela Merkel and new French President Francois Hollande late Tuesday, the pair said that Berlin and Paris were prepared "to study the possibility of additional growth measures in Greece."
Barroso announced an informal summit of EU and eurozone leaders for next Wednesday before another June 28-29 summit.
He called for "targeted investment" within the EU alongside "sound public finances and deep structural investment."
He particularly urged leaders to agree on a 10-billion-euro capital injection into the European Investment Bank, to boost lending to companies and therefore encourage employment.
A day after Austria and Luxembourg blocked plans to claim unpaid tax from accounts in havens such as Switzerland and elsewhere, Barroso demanded a mandate to negotiate for these hidden funds that could be used to kickstart growth.
He said he had a "long conversation" with Hollande which would help see them prioritise key aims before G8 discussions in the United States on Friday and Saturday.
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