Schulz: Special flexibility, but no ‘blank cheque’ for Greece

Martin Schulz left the door open on Thursday (5 November) for Greece to be granted fiscal flexibility due to the refugee crisis. EURACTIV Greece reports.

But a source close to the EU Parliament chief told EURACTIV Greece that the bailout reforms should be implemented.

Schulz’s visit took place after another tragedy in Greek waters last week (28 October), when an estimated 11 refugees died in the eastern Aegean Sea, in five separate incidents.

>>Read: Tsipras: Unlike Hungary, Athens will help resolve the refugee crisis

Athens committed to taking in 30,000 refugees by the end of the year, with the United Nations guaranteeing support for 20,000 additional asylum seekers.

Martin Schulz visited the island of Lesbos, together with the Greek Prime Minister, Alexis Tsipras, and conceded that the situation on the eastern Aegean island is “dramatic".

"We must urgently reinforce efforts to complete hotspots. To be effective, however, all member states must take part in the relocation."

While in Greece, the EU official also visited Athens, for the first relocation of refugees from Greece, to Luxembourg.

“Exceptional circumstances”

In an interview with the Athens-Macedonian News Agency, Schulz left the door open for Athens to make flexible use of fiscal rules due to the refugee crisis.

"Greece is facing the most difficult challenge since World War II amid the economic and refugee crisis. The Stability Pact provides for special flexibility in case of emergency situations.”

The cost of the refugee crisis has fueled the tensions between the champions of strict budgetary discipline, led by Germany, and those who want to ease interpretations of the rules, led by Italy and France.

>>Read: EU drags on Stability and Growth Pact reform

Italy, Austria and Ireland have formally requested more budgetary leeway under the Stability and Growth Pact due to the "exceptional circumstance" they faced with the influx of refugees over the past year.

Asked if Greece's agreement with creditors should be connected with the issue of refugees, he said he would not recommend that.

"The first one is a Greek issue, which needs to be solved within the eurozone, and the other one is not a Greek issue, it is a European problem that has occurred in Greece,” he stressed.

In another interview with Skai.gr, the EU official reiterated that the difficult situation, the refugee crisis should not be linked to the third bailout agreement agreed on last summer.

“I cannot understand Alexis Tsipras who said that Greece cannot deliver the [bailout] programme due to the refugee crisis and I agree with Moscovici that we have to separate those two”.

During a visit this week in Athens, European Commissioner for Economic and Financial Affairs Pierre Moscovici stated that the Commission "has rules and in Greece there is a memorandum and a bailout program and the reforms must not stop".

According to Moscovici, Jean-Claude Juncker has talked about flexibility under extraordinary circumstances, something that will be examined, but "we cannot talk for a general relaxation of the rules".

A source close to the President told EURACTIV Greece that Schulz’s view is that some flexibility needs to be shown to countries like Greece “to the extent that overshoots are due to the increased costs of dealing with refugee arrivals".

“Of course this is not at all a blank cheque for the Greek government to renege grossly on its commitments though,” the source added.

Syriza’s reaction

On the other hand, Athens claims that it never tried to connect the ongoing refugee crisis with the bailout deal.

Greek government sources told EURACTIV Greece that during his meeting with Martin Schulz, Tsipras made it clear that Athens would “in any case contribute to resolving the refugee crisis and would anyway push for better negotiation terms as some measures are unfair".

The same source said that the linkage of those two issues would not be “diplomatically correct.”

“Greece has different allies regarding the bailout and the refugee crisis”, the source explained, adding that the Greek government will listen to what Schulz said about the need for a special flexibility.

The fence and Turkey

The Greek government is facing increasing pressure to take down a fence along its land border with Turkey, and stop refugees from making the deadly journey to Europe via the Mediterranean.

>>Read: Tsipras under pressure to tear down Turkish border fence

Commenting on that, Schulz said that it would be wrong to tear down the fence and emphasized the role that Ankara should play.

“It is the responsibility of the Turkish authorities to control the waves of immigrants that cross the borders," Schulz said.

He also stressed that the EU plan for 50,000 refugees to be hosted in Greece was not realistic, as the debt-ridden country can receive no more than 5,500 people.