First euro test for new coalition

Finance Minister Yannis Stournaras was experiencing his first encounter with his eurozone counterparts at Monday's Eurogroup meeting in Brussels, where the Greek bailout was one of several items on an agenda that included the support package for Cyprus and details of a bank rescue.

Stournaras, who had been warned by troika officials in Athens last week to expect a rough ride at his first Eurogroup, was expected to set out for his counterparts how Greece had slipped behind its targets, both in terms of reforms and fiscal adjustment.

Finance ministers were due to receive a report on the first mission by the troika of the European Union, the European Central Bank and the International Monetary Fund to Greece since the June 17 elections. It was expected to show that Athens was off course for 210 of its targets and would need to step up its structural reforms.

Stournaras was expected to repeat the position of the new coalition government that it would first seek to get its program back on track and then negotiate with its lenders possible changes to the fiscal adjustment process, which is likely to include a request for two extra years beyond 2014 to meet its targets.

The meeting in Brussels had not ended by late Monday.

Speaking to Skai TV ahead of the Eurogroup talks, government spokesman Simos Kedikoglou said Athens would not be seeking an immediate renegotiation of its bailout terms.

“At the moment, we are way off our targets,” he said. “We cannot negotiate because to do so you need to give and take. The clear impression we got at the recent EU leaders’ summit was that there are some who are looking for an excuse to push us out of the euro. But most people are telling us that if we prove we are moving in the right direction, there will be room to negotiate.”

Ahead of the meeting, Luxembourg’s Finance Minister Luc Frieden suggested that his colleagues would take a lenient view of the Greek government and the challenge it faces.

“First of all, I’m happy that we have a coalition in Greece now, which wants to negotiate with Europe and is willing to enact reforms,” he told journalists.

“We have to see how realistic the things are that we want from Greece. I think we can accommodate Greece, but Greece must also know that it’s not a one-way street. Greece has to enact a series of reforms that we have demanded; we will need to hear the Greek minister about this.”  

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