Greece gets warning from Eurozone finance chief

ATHENS — During Greece’s three-year financial drama,Jean-Claude Juncker, the prime minister of Luxembourg, has proffered a sympathetic ear to the near-bankrupt nation as it seeks to fix its broken economy.

But on a vital visit to Athens on Wednesday, the usually mild-mannered policymaker, who also chairs the meetings of the 17-nation Eurozone’s finance ministers, sounded a stern warning.

“I am totally opposed to a Greek exit from the euro,” Juncker said after two hours of talks with Greek Prime Minister Antonis Samaras and members of his precarious coalition. “It would not help Greece and it would pose a major risk for Europe as a whole.”

Still, he told reporters, underscoring the urgency of Athens’ need to deliver on lagging fiscal reforms, “the ball is in the Greek court.”

“In fact,” Juncker said, “this is the last chance, and Greek citizens have to know it.”

With Greece’s economy seizing up and the specter of default looming, Juncker’s comments marked an uneasy start to a high-gear diplomatic offensive Samaras hopes to undertake this week in a desperate attempt to convince European creditors that Athens can put its economic reforms back on track — if given more time.

Juncker is the most influential European policymaker to visit Athens since a June election put Samaras at the head of a shaky, conservative-led coalition government.

Two previous Greek governments failed to comply with the terms of two multibillion-dollar bailouts of the country by its European peers and the International Monetary Fund — rescue funds that have so far spared the cash-strapped nation and the rest of the Eurozone from the potentially catastrophic effects of a Greek bankruptcy.

Officials in Athens hoped Wednesday’s talks could build momentum for crucial sessions Samaras is to hold this week with German Chancellor Angela Merkel and French President Francois Hollande in Berlin and Paris.

“This meeting,” Samaras said, before moving Juncker to a more relaxing setting at the foot of the Acropolis for a working dinner, “was a positive step ahead of the upcoming meetings.”

Pundits and politicians suggested the pair would pore over details of a Greek plan designed to give Athens more time to meet its deficit targets without asking its Eurozone partners for fresh funds.

“Fiscal consolidation would strengthen the chances” of such a plan, Juncker said, adding that officials from the European Commission, the European Central Bank and the IMF keeping track of Athens’ austerity program had to first determine whether the proposal was “credible and verifiable.”

Under the latest bailout deal, Greece has to deliver on at least $14 billion in added budget cuts to keep its emergency loans flowing. The funds help Athens pay state salaries and pensions, among other expenses.

But three years into a biting recession that has led to public anger over the painful reforms, Athens says it needs a bit of a breather to ease social suffering and head off upheaval.

“All we want is a bit of ‘air to breathe’ to get the economy running and to increase state income. More time does not automatically mean more money,” Samaras toldGermany’sBild newspaper.

Samaras stitched together his coalition on the basis of a pledge to temper austerity with growth-oriented policies and an additional two years to fulfill Greece’s commitments to international lenders. The current deadline is December 2014.

WithGermany’sMerkel balking at any talk of added leeway — or money — analysts say the prognosis for Samaras’ confidence-building offensive looks bleak.

“This will be a very hard sell for the Greek government,” Megan Greene of London-based Roubini Global Economics wrote in a recent analysis. “A relaxation of fiscal targets would require additional funding for Greece, but asking the Bundestag to approve more bailout money for the small country is an absolute nonstarter.”

Carassava is a special correspondent.