Dijsselbloem: Keeping election promises could derail state budget

dijsselbloem-election-promises-could-derail-budgetThe carrot and the stick approach, assumed by European Parliament president Martin Schultz before his visit to Athens today, is apparently becoming the norm for European officials. They make strict warnings just before they visit the new PM and appear friendly and consenting after meeting with him.

One day before his meeting with Tsipras on Friday, the head of the euro zone finance ministers’ group said that the new Greek government led by the left-wing, anti-bailout SYRIZA party, could derail reforms and economic recovery if it sticks to its election campaign promises.

Eurogroup chief Jeroen Dijsselbloem, who travels to Athens on Friday for talks with the new ministers, added it was “too early to judge” what the Greek government would actually do.

“In all honesty if you add up all the promises (of the election campaign), then the Greek budget will very quickly run totally off course,” Dijsselbloem said in Amsterdam.

Dijsselbloem said he was open to hearing the Greek government’s plans for easing the country’s debt burden, but added: “What’s most important for Greece is that they simply adhere to the agreements that we have with each other.”

If increased government spending turns Greece’s budget surplus back into a deficit “then lightening the debt burden won’t help”, he added.

Greece “has the ambition” to remain in the euro zone and that is what its partners also want, Dijsselbloem said.

In Athens on Friday he will meet new Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis for talks that will mark the start of Greece’s negotiations on changing the conditions of its international bailout.

Reuters, EPA