Moscovici warns Greece to agree to reforms or face default

The EU's top economic official has set the mid-May meeting of eurozone finance ministers as the "decisive" moment for Greece to agree a new set of economic reforms or face possible default.

Speaking to the Financial Times in Washington on Friday on the fringes of the International Monetary Fund spring meetings, Pierre Moscovici, the European commissioner for economic and financial affairs, confirmed that there was little chance of a deal next week.

Insisting there was no "plan B" regarding an exit from the eurozone, he called on Greece to "speed up" concrete technical discussions on a list of reforms it has submitted that, if agreed, would unlock the remaining €7.2bn loans from Greece's eurozone partners.

Without this money available, Greece is likely to run out of money and default either to the IMF in May or June, or to the European Central Bank later in the summer when large numbers of bonds held by the central bank mature.

Negotiators from the organisations formerly known as the Troika - the European Commission, the IMF and the ECB - have expressed deep frustration in Washington that Greece has not taken the technical talks seriously over the past few weeks and are in no mood to release the money without substantive progress.

Long-stalled talks between leaders of the teams from Athens and the bailout monitors are scheduled to resume in Brussels tomorrow [Saturday], according to a commission spokeswoman.

Some officials privately talk of their hope that the Greek government will take the discussions more seriously, but many expect the country will default in the next few months.

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"We've got two meetings which are important. The April 24 meeting in Riga must not be a wasted moment; it must be a useful moment in which we see concrete progress in catching up with those reforms, and then the next meeting on May 11, which certainly must be decisive," he said.

He said the discussions with the Greek authorities had been "not precise enough. We are not talking about nothing. We are talking about things, but now we need to make progress".

While other European officials are now privately musing about Greece defaulting and then possibly leaving the euro, Mr Moscovici said the commission was determined to make the negotiations work - and there was no work being done on a plan B.

"If integrity is not preserved [with Greece leaving], it means the euro is no more a single currency. It is just a system of fixed rates and so it's weaker than before, and we want the integrity of the eurozone," he said.

Mr Moscovici added: "Grexit would be bad for the eurozone as a whole; bad for Greek people; bad for the financial system; of course it would be bad. The financial risk could be addressed, but it would be bad. So no Grexit is our motto."

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