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Eurogroup, ECB Continue Credit Cut-Off against Greece

May 12, 2015 (EIRNS)—The Eurogroup meeting of the Euro area’s 19 Finance Ministers decided to continue the virtual cut-off of credit liquidity to Greece, and, as usual, issued a meaningless statement praising "progress" in the technical talks but saying more has to be done.

Greek Finance Minister Yanis Varoufakis issued an equally empty statement about progress, but reiterated Greece’s disagreement on cutting pensions and eliminating further protections for labor. He warned that because of Europe’s refusal to come to a positive agreement, Greece’s financial situation remains precarious.

Greek Member of the European Parliament Notis Marias was more blunt and denounced European Central Bank President Mario Draghi’s policy of blackmail through cutting liquidity to Greek banks. Marias told the Greek radio station "The Red" that Athens should demand that the Troika withdraw the ECB from the group comprising the International Monetary Fund, the European Central Bank (ECB), and European Commission.

Also, the Greek MEP pointed out that the ECB should enable Greek banks to increase their purchases of Greek government Treasury bills and noted that any additional haircut "guarantees" of Greek banks escalate the political blackmail via the ECB’s credit crunch "to force our country to bow to the demands of Troika lenders and loan sharks."

The daily Kathimerini reports that the liquidity crunch has forced several European Commission-subsidized projects to halt, because contractors could not get working capital. These include major projects such as highway concessions, as well as smaller, but important, public works such as sewage and school construction. The Association of Greek Construction Companies issued a statement yesterday, warning, "State projects around the country are falling apart, as they see work stop one after another due to the financial constraints of construction firms."