Spanish official slams Greece, says time ‘running out’
WASHINGTON (AP) — Spain’s Economy Minister Luis de Guindos criticized Greece’s left-wing government for its “not very coherent” approach to negotiations over its finances and economy.
“We have wasted very precious time over the last three or four weeks,” de Guindos said in an interview Friday with The Associated Press. “They have not made a lot of friends.”
Greece has relied on loans from European creditors and the International Monetary Fund since 2010. It is in talks over the conditions for its next loan installment, without which it could default as soon as next month. That has sent Greece’s borrowing costs soaring.
De Guindos says he hopes significant progress in the negotiations will occur before a European finance ministers meeting May 11.
“Time is running out,” he said.
De Guindos spoke on the sidelines of the semiannual meetings of the IMF and World Bank. He criticized Greek officials for previously raising the specter of default, only to then reverse themselves.
Greek’s Syriza Party was elected in January on a promise to end crippling austerity measures. Yet in February it agreed with its lenders to propose a series of economic reforms in order to obtain a 7.2 billion-euro loan.
Without those funds, it may not be able to pay the IMF about 1 billion euros that it owes next month. Yet Germany and other European nations have criticized Greece this week for failing to propose sufficiently broad economic reforms as a condition for the loan.
De Guindos sounded a similar note Friday. Greece’s government needs to privatize state-owned companies, cut red tape and continue to reduce spending, he said.
“We are not discussing restructuring or forgiving the debt,” he said. “We are discussing the kind of reforms to make the Greek economy efficient, competitive and growing again.”
Yet Greece’s Finance Minister, Yanis Varoufakis, on Thursday denounced the sale of public companies by previous Greek governments as “disasters” because they were sold at “fire sale prices.” He said the government also opposes some other reforms that its creditors have demanded, including deep cuts to state pensions and legal changes that would make it easier for companies to fire workers.
Despite the ongoing disagreement, de Guindos said the possibility of Greece leaving the euro was “off the table.”
“It could be extremely detrimental to everybody, especially Greece, but also extremely detrimental to the rest of Europe,” he said.
Separately, de Guindos predicted Spain’s economic recovery would accelerate this year. The nation’s economy emerged from a crippling recession and grew 1.4 percent last year.
That growth rate will double this year, de Guindos predicted, and would lead to the creation of 600,000 jobs, up from 430,000 in 2014.
“Three years ago we were one of the main problems in the eurozone,” he said, referring to the 19 nations that share the euro currency. “Now, we are leading the pack.”
Still, he would not predict when unemployment would fall from its current sky-high level of almost 24 percent to below 20 percent. Spain will hold national elections later this year.
De Guindos also did not highlight any initiatives to address youth unemployment, which has left nearly half of young Spaniards out of work. Stronger economic growth was critical to lowering that rate, he said.
“Without growth and recovery it is impossible to make a dent in that unemployment rate, particularly for young people and the long-term unemployed.”