Greeks should swiftly implement austerity plan, says Noonan

The Greek government should move swiftly to implement the austerity measures contained in its bailout plan to prove it is serious and increase trust with its creditors, Minister for Finance Michael Noonan has said.

Mr Noonan, speaking as he entered a meeting of euro zone finance ministers in Brussels, said Greek prime minister Alexis Tsipras should move quickly as his majority in parliament diminishes.

Separately, Taoiseach Enda Kenny has said he remains hopeful that a third bailout programme for Greece will be approved.

Ms Tsipras on Friday night secured parliamentary support for the application for a third bailout for Greece even though some in his Syriza party did not back his stance.

Saturday’s meeting of finance ministers will consider whether to open negotiations with Greece on a third bailout.

“I am glad they got such a parliamentary majority last night,” Mr Noonan said. “A lot of people today would be concerned that Greeks should move and start implementing measures immediately because the parliamentary majority of the government in Athens now is being eroded, and they may not have the capacity to implement the measures they have agreed as time goes by.

“It would certainly build up trust if they stayed in parliament next week and the week after and start implementing by way of legislating what they have now agreed to support.

“It is very hard to deliver if your parliamentary majority diminishes, so while they have a majority and cross-party support, I believe they should move and carry out the main legislative changes.”

As euro finance ministers arrived in Brussels on Saturday, the mood ranged from very cautious optimism to grim-faced silence.

Eurogroup head Jeroen Dijsselbloem said ministers were "not there yet" on a deal with Greece and that concerns remained on the issue of trust that promised reforms will be implemented.

“They will have to show a very strong commitment to rebuild trust,” he said on his way into the meeting.

Many officials said the proposals submitted by Athens represented some progress, but the key lay in nailing down implementation.

Long-time euro group watchers say Saturday’s meeting is set to run long, with considerable detail and double-checking required of the proposal’s figures.

If the deal is done, they said, Sunday’s planned summit of all EU leaders need not happen. If that meeting goes ahead, the source said, the omens are not good for Greece’s future in the currency union.

Mr Noonan struck a hopeful note that agreement with Greece can be reached, and said he was entering Saturday’s meeting “on the basis that it will be possible to put a sustainable medium term programme in place”.

Today’s negotiations can build on Friday night’s vote in the Greek parliament, he said, but added more information is needed on a number of issues.

“The Greek paper was silent on banking. Obviously the Greek banks are in difficulty now and it is going to cost money to put them back on an even keel, so we need a full briefing on that.

“Secondly, I said we needed a medium term sustainable programme. Sustainability depends a lot on whether the programme is sufficient to cause the Greek economy to grow, to create jobs, so I’ll be looking at the overall composition to see if the economy can grow and if jobs can be created.

“I think extra measures are probably needed there.

“It is very hard to stimulate an economy on the demand side when you are doing corrective work, so they need more supply side initiatives, which effectively means a lot of reform which doesn’t seem to be built into the programme.”

However, he said trust between the Greek government and other euro zone countries will be a major element of any agreement.

“Trust was what the Irish programme, the Spanish programme and the Portuguese programme were built on, and I think trust is now being rebuilt in the relationship with Greece. I would hope that the trust will continue to be rebuilt today.”

The level of contribution from Ireland to a third bailout will depend on the shape of a Greek programme, Mr Noonan said.

“Whatever the Irish liability is, it won’t have an immediate budget impact. As years go by we will be incurring a liability - but that liability wouldn’t be called in if everything went well.”

The Greek referendum last week, while a political victory for the government, had a “disastrous economic and social outturn, and significant damage has been done to the banking system”.

The Syriza government has moved to mend “their hand very quickly”, but Mr Noonan said: “It would be better if what is happening now happened last February, because quite a bit of damage was done.”

Speaking in Cork at the opening of a new maritime facility, Mr Kenny said he and his counterparts all over Europe were waiting for the outcome of the finance ministers’ meeting to see if a leaders’ summit would be required tomorrow.

“I hope it goes in the direction of the agreement of the meeting last Tuesday of the euro zone leaders where the prime minister was expected to lodge an application for a third programme. He has now done that and he was to follow that up with specific proposals from Greece which have been tabled.

“These have been adopted and supported by the Greek government. These are being assessed by the institutions and are now being discussed by the euro zone ministers. If it can be concluded there, so much the better. If that is not the case then clearly the leaders of the full European Council will be summoned to Brussels. I would be very optimistic, I have to say, because I think it can all be put together.”

Mr Kenny said he was concerned about the hardship instability has caused ordinary Greek people. He stressed of the 19 leaders at the euro zone meeting last week, eighteen of them outside of Greece were very adamant that whatever should be done must be done to keep Greece as a functioning member of the euro zone.

“Prime minister Tspiras was very clear about what his intentions were in complying with requirements in terms of continuing to have Greece as a functioning member. The leaders of the euro zone were very adamant in their encouragement and their support, with conditions attached of course, for Greece. This is called democracy.”

He insisted that it was perfectly democratic for the Greek government to call a referendum.

Mr Kenny added other euro zone countries in the are kept together by multi-party situations where they are required to put issues like this to their various parliaments such as Finland, the Netherlands and Germany.

“If a third programme is finally approved that will have to be signed-off by various Governments as well. But from my point of view I would be very optimistic. If that is the case, and I hope that will be the case, it will demonstrate once again that Europe functions well when it puts its mind to it. I just hope this is not premature and that the euro zone group meeting can be concluded. But the important thing is that the Greek Parliament have endorsed the proposals tabled by Prime Minister Tspiras.”