18:03 GMT31 May 2020
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    Eurogroup chiefs are meeting in Riga, where Greece and it's money, or lack of it, is top of the agenda. "There is a great sense of urgency for all of us," said Eurogroup chief and Dutch finance minister Jeroen Dijsselbloem.

    "Time is running out. But there is a great determination among our Greek colleagues," said Dijsselbloem.

    Greek officials told reporters that the country was making progress on lowering its budget surplus target. However, EU officials told Reuters: "Wide differences remain over reforms of the labor market, pension system, taxation and public finances."

    And there's little expectation a solution will be reached in Riga.

    "Officials are stressing that they're not expecting any sort of solution at this meeting," Jonathan Loynes, Chief European Economist and Director of Capital Economics told Sputnik News. "They're not really expecting much…

    "It's generally decided that it's not a good idea setting Greece specific deadlines. If deadlines are missed, market concerns increase. If you set deadlines and the meeting passes without a deal, there's real concern that it will prompt another flurry of money out of the banks."

    Accidental Grexit From Eurozone

    But according to Loynes, there are downsides to not setting deadlines. He says it reduces the pressure on Greece to come up with the reforms to unlock the bailout money and could potentially lead to Greece accidentally exiting the eurozone. 

    "I think Greece will leave at some point. We said that five years ago. I can't see a lasting solution for Greece in the currency union," Jonathan Loynes told Sputnik News.

    "We're meeting the crunch point when they'll run out of money. The authorities are not in control of this situation which raises the prospect of an accidental exit from the eurozone over the next few months."

    According to Loynes, there's around a 50 percent risk that over the medium horizon, Greece is going to leave the currency union.

    "It is simply not making any real progress.

    "It's not just about scrabbling around for money down the back of the sofa, they've got big repayments to make."

    The Greek government needs $7.8 billion (7.2 billion euros) to tide it over for the next few months. Without the money — the country will default — and potentially, leave the eurozone. But this, says Loynes, is not necessarily a bad thing.

    "There are certainly potential medium to long-term positives for Greece leaving the currency union. Its stuck in one it doesn't really belong to. It doesn't behave like other economies in that union."

    But whether Greece remains in or leaves the eurozone, albeit by accident, Loynes doesn't believe the actions will be determined through a rational decision process.

    "A Grexit could be down to economic failures, not as a result of decisions made by policy makers."


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    economic recession, bailout program, Greek economy, economic assistance, Grexit, currency, currency union, bank, Eurogroup, International Monetary Fund, Eurozone, Riga, Europe, Greece
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