Europe News

Greece still needs to build trust: Eurogroup head

Trust in the Greek government has yet to return after months of wrangling to secure a third bailout deal for the debt-struck country, the head of the Eurogroup of finance ministers said Saturday.

"In the last half year with the Syriza government, trust has gone away completely…So what we need now is a serious government which is implementing (reforms) seriously and that will bring back trust and I think that's the key issue…trust, consumers, producers, investors trust that's key," Eurogroup president Jeroen Dijsselbloem,told CNBC on the sidelines of the G20 meeting in Ankara, Turkey.

Dijsselbloem, was a key figure in negotiating Greece's 86 billion euros ($95.2 billion) bailout in return for the country implementing reforms. The Dutch politician also had a number of clashes with Greece's leftist Syriza government and in particular, the firebrand ex-finance minister Yanis Varoufakis.

The debt saga saw a breakdown in relations between Greece and many of the negotiators, including Dijsselbloem, who said that trust has still not returned.

The Eurogroup president said that the Syriza government wanted to reject "the whole fundamentals of the euro zone" which was not acceptable.

Measures ‘not draconian’

"In the end, the Tsipras government decided we want to stay in the euro zone, we will accept the basic arrangements of that, and commit to a basic program which they need. So if you ask me has trust returned, that will be a bit quick to say that, it's going to take time," Dijsselbloem said.

Greece's former Prime Minister Alexis Tsipras resigned last month and called a snap election to boost support for the country's new bailout program. Elections are due to take place on September 20.

The debt crisis saw Greek banks almost run out of cash, withdrawal limits on ATMs put in place, while the possibility of the country leaving the euro area sent jitters around global financial markets.

Greece accepted the third bailout on condition of implementing certain reforms, a move that Varoufakis has slammed.

In an interview with CNBC on Friday, the former Greek finance minister said that even a child could see why the Greek bailout was not going to work, arguing further austerity is not the way to get Greece back on track.

Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem.
Yves Herman | Reuters

But Dijsselbloem said the terms of the bailout addressed the key problems in the Greek economy.

"I don't think the conditionality is draconian, it really deals with the key problems in Greek governments, administration, and the private sector, the economy. It needs to be done," he told CNBC.

Dijsselbloem said that if Tsipras is re-elected, he would be able to push through the necessary reforms.

"He (Tsipras) can (deliver reforms). We have had very difficult moments in the negotiations over the last half year, and actually the only way to get a breakthrough in those difficult moments was for me to pick up the phone and to call the Prime Minister himself," Dijsselbloem added.

"That worked and I think that he could deliver but it's up to the voters of course to see whether they give him another chance," Dijsselbloem said.

Fight with Varoufakis?

Dijsselbloem also took the chance to deny a report in French newspaper Liberation earlier this year that a fight almost broke out between him and Varoufakis at a Eurogroup meeting.

"I heard about the story, but I don't do fighting. It's not on my repertoire, we've had verbally many many blows, of course some of his behavior towards the colleagues was unacceptable and the political differences on substance of how to deal with this have been very very large," Dijsselbloem said.

Reports also suggested that Pierre Moscovici, the European Commissioner for economic and financial affairs stepped in to break up the fight, another point that Dijsselbloem denied and joked about.

"I was relieved to hear that Commissioner Moscovici stood ready to intervene if such a thing would have happened," Dijsselbloem said.