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Roundup: Lithuania to weigh financial support to Greece

Xinhua, July 14, 2015 Adjust font size:

Lithuania's decision as to whether to approve or reject financial support to Greece from the European Stability Mechanism (ESM) will depend on Greece's determination to implement painful, necessary economic reforms, Lithuania's President Dalia Grybauskaite said Monday.

"Indeed, our government, based on procedural rules, will have to make a decision on this issue. However, it will be made only after corresponding steps (by Athens)," Grybauskaite told journalists after meeting with Latvian President Raimonds Vejonis, local website vz.lt reported.

According to Grybauskaite, Greece must approve its obligations, agreed with the European Union, and pass corresponding legislation this week.

"Only after these steps are made by Athens, eurozone ministers will be given the mandate to negotiate on the new (financial support) program," she noted.

It is still not clear how much time will be needed for the negotiations, Grybauskaite added. She expressed her frustration with Greece government's "irresponsible behavior," where the country will have "to take a very painful and costly path both for Greek themselves and all of us."

"During almost half a year of ruling, the new Greek government made a lot of harm and almost pushed the country to the brink of default," Grybauskaite stressed.

If the new financial support program for Greece is approved by the creditors, Lithuania as the newest eurozone member for the first time would participate in such a program. Lithuania's payment of paid-in capital to the ESM will be made in five annual installments of more than 60 million euros (66.18 million U.S. dollars) each.

Rimantas Sadzius, Lithuania's Minister of Finance, said Greek authorities must demonstrate their strong political will and approve reform measures agreed after eurozone talks last weekend in Brussels.

"Hopefully, everything will go according to this central scenario, but, certainly, the probability of this is not 100 percent," the minister said in an interview with BNS news agency on Monday.

According to him, it will be extremely difficult for Greece's authorities to adopt decisions, but this has to be done.

Gitanas Nauseda, adviser to the president at SEB bank in Vilnius, believes that Greece's debts will have to be restructured as reforms and Brussels' assistance will not be enough for the country to get back on track.

"I am sure that the issue of debt restructuring will come up as well. This is necessary for Greece to start breathing easier and carry out reforms in easier circumstances," he added.

Ramunas Vilpisauskas, political scientist and director of the Vilnius Institute of International Relations and Political Science, said the largest uncertainty is related to if Greece will stick to its obligations.

The Greek crisis will be discussed at the Seimas, Lithuanian parliament, on Wednesday. Endit