World Economy

Europe Led Across “Bridge to Nowhere”

Europe Led Across “Bridge to Nowhere”Europe Led Across “Bridge to Nowhere”

Europe is being led across a “bridge to nowhere” by Greece, the governor of Finland’s central bank warned over the weekend.

Erkki Liikanen said the ongoing delay in negotiations between the troubled country and its creditors was putting those countries that have supported it at risk, Yahoo News reported.

The governor, who is also a European Central Bank governing council member, warned that if an agreement continues to be stalled, Greece’s problems will be even greater.

He said: “Countries that have supported Greece have taken a risk towards their own taxpayers. Most people want to have a solution, not just words, which are a bridge to nowhere.

“In late 2014 the Greek economy was moving into a good direction. If this uncertainty continues, the economy will be weak, and the problems will be bigger, so they need to have solutions which make the economy competitive.”

Liikanen also said he believes the country’s budget targets ought to be reduced in order to better reflect its economic performance, but special treatment should not be given, the Telegraph reported.

His comments came after he last week described the situation of his own country’s economy as “grave”.

“The key to resolving the serious problems in the economy lies in structural reforms, fiscal consolidation and improved cost competitiveness,” he said.

 Difficult Compromise

Greek Premier Alexis Tsipras warned Greece on Saturday to prepare for a “difficult compromise” with its EU-IMF creditors as his closest advisors delivered a last-chance proposal to avert a catastrophic default by Athens, AFP reported.

Cash-starved Greece is under huge pressure to strike an agreement to unlock vital bailout funds in the coming days, if not hours, after top eurozone officials turned the screws Friday and said they were preparing the ground for an Athens default.

The Tsipras envoys brought his latest bid to end a five-month standoff with the EU and IMF, who are demanding tough reforms in exchange for giving Athens €7.2 billion  ($8.1 billion) still remaining in its international rescue package.

“If we arrive at a viable accord, even if it is a difficult compromise, we will take up the challenge because our only criteria is to get out of the crisis,” Tsipras was quoted as telling Greek officials late Friday in a government statement.

Whatever needs to be done “needs to be done quickly”, deputy finance minister Dimitris Mardas told Skai TV in Athens. He predicted there would be a deal.

Across the table from the Greeks were the three institutions responsible for overseeing their bailout, the second since 2010: the EU’s Commission, the European Central Bank and the International Monetary Fund. The latter are the most pro-austerity of Greece’s creditors.

A German media report said “tensions” had arisen between the European Commission and the IMF in recent days.

Citing a “negotiator” as its source, the Frankfurter Allgemeine Zeitung said in its Sunday edition that the IMF had “torpedoed” a recent attempt by EC President Jean-Claude Juncker to offer Athens a compromise deal.

The proposal would reportedly have allowed Athens to postpone some €400 million in pension cuts in return for making similar savings on military spending.