Edward Scicluna.

Tomorrow’s crucial eurozone finance ministers meeting on Greece’s bailout programme is “touch and go” according to Finance Minister Edward Scicluna who believes that the situation in Greece is “even worse than expected”.

Prof. Scicluna told The Sunday Times of Malta that Greece’s eurozone partners were being asked for impossible favours “with offensive statements to boot” and that most eurozone finance ministers were disappointed with the statements made by the newly elected Greek Cabinet members in the run-up to the country’s recent general election and its aftermath.

However, he said that the current poor economic situation in Greece was partly because of too much austerity and partly because not enough reforms were carried out over the last few years.

Asked whether he envisaged a situation whereby if there is no deal with Greece by February 28, when the current €240 billion bailout runs out, the European Central Bank will simply turn off the taps for Greek banks, Prof. Scicluna said: “That depends entirely on Greece.

“The government seemed to have realised this at the end of the tour-de-table. The problem is how to transmit this message.”

He said that while it was important for Greece not to reverse its reform programme he believed eurozone members will “bend over backwards” to help the country on humanitarian grounds and for a mutually agreed way to a quicker recovery. “This is for the good of all, not least for Greece itself,” he said.

Partners are being asked for impossible favours, with offensive statements to boot

Prof. Scicluna said that should Greece go ahead with some of its electoral promises such as raising the minimum wage or increasing pensions the new government would have to come up with some other policies to compensate for this such as clamping down further on tax evasion or imposing new taxes on the rich.

He insisted that the eurozone would not compromise on Greece’s debt repayment.

“Greece’s debt repayment programme is no more burdensome that what other countries such as Ireland went through,” he said.

However, Prof. Scicluna believes a compromise is possible on the size of the Greek budget surplus requirement, which at present stands at four per cent of GDP. Prof. Scicluna said Greek Finance Minister Yanis Varoufakis told his eurozone counterparts last week that he appreciated that countries such as Malta had to borrow money in order to lend money to Greece for the country’s bailout.

Malta loaned Greece almost €200 million as part of its bailout programme, and Prof. Scicluna said: “The Greek Finance Minister has now publicly given his word that all debts, including Malta’s, will be honoured.

“We will now cooperate with everybody to ensure that that becomes possible.”