Juncker: ‘There will be no default’

The Greek government is testing European Commission president’s patience, but he says there will be no Grexit.

European Commission President Jean-Claude Juncker warned Monday that Greek intransigence risks pushing the continent towards economic catastrophe and rebuked Athens for an “unacceptable” lack of cooperation.

An agreement on a financial rescue package remains distant, Juncker said, but he ruled out a Greek debt default or exit from the eurozone. In an interview with POLITICO, Juncker said his main reason for optimism rests less on any tangible progress than on the simple fact that the alternative is unimaginable.

Speaking from his office in the Berlaymont building, Juncker pushed back on an increasingly commonplace view among eurozone leaders that a Greek default could be a lever to force the Syriza-led government to get serious about its finances, and that its fallout could be contained. He declined to elaborate on the nightmare scenarios he sees potentially unfolding but warned that the failure to keep Greece afloat would “lead us to consequences that people don’t know the amplitude about.”

“We are prepared for all kinds of events but I am excluding at 100 percent this Grexit, or Greek exit,” Juncker said. “There will be no default.”

Juncker said the negotiations in recent days between Greece and its lenders “started to move in the right direction, but it’s still a long way to go.” The Greek government continues to insist on pulling back on austerity measures, while the eurozone countries expect significant reforms in exchange for €7.2 billion to ease its cash crunch.

Greek government officials and representatives from the International Monetary Fund, the European Central Bank and the European Stability Mechanism have been locked in negotiations in Paris since Saturday. European Union officials had wanted Greece to propose a list of reforms by this week, ahead of a meeting Friday of Eurogroup finance ministers in Riga.

“I am highly preoccupied that the Greek government will let us know in time what is happening,” he added. “We need clarity and haven’t gotten it. I had lost patience in the meantime. Now I regained patience and do not want to lose it again.”

Juncker’s tone reflects growing exasperation among many eurozone officials with Syriza. Better known for cautious appraisals, Juncker scolded Athens for blocking its European creditors from accessing critical documents in Greek government buildings.

“I have been dealing with this so-called Greek problem for so many years now,” said Juncker, a former president of the Eurogroup. Correcting himself, he added: “No, not a so-called problem — it is a problem. They are not collaborating in the way we would like them to collaborate because our team down in Athens, our technical fact-finding team, is not allowed to enter the ministries, which is not just curious but even unacceptable.”

Juncker, 60, set high expectations for his presidency when he came into office last year, describing his team as the “last-chance Commission” – a reference to the tenuous standing of European institutions in public opinion in several member countries.

Juncker himself got off to a rough start when leaked documents last year showed hundreds of firms used Luxembourg to avoid taxes while he was prime minister. Six months into his term, support for EU institutions remains low, negotiations on an ambitious trade deal with the United States limp along, Britain is still contemplating an exit, and Greece teeters on the brink of a default.

And on Monday, the long-simmering migration crisis leapt to the top of the agenda, as European leaders rushed to respond to the deaths Saturday of as many as 700 people when a boat capsized in the Mediterranean.

Shortly after European Council President Donald Tusk announced plans for an emergency summit Thursday, Juncker told POLITICO that he would speed up the release of his migration plan from July to next month.

While former European Commission President José Manuel Barroso was mocked for seeking guidance from Berlin and Paris before presenting major policy initiatives, Juncker suggested he wouldn’t extend the same courtesy on the continent’s migration problems.

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“We have been pushing for action by the member states,” Juncker said. “We are pushing. I am hoping for strong commitments by European leaders on Thursday. They need to do something now. I am tired of the rhetoric of consternation.”

On the trade talks between the European Union and the United States, Juncker said European leaders must do a better job of explaining why it benefits the Continent. He acknowledged that critics have succeeded in slanting public opinion against the pact: “It is far gone. We have to take it back.”

But he suggested he wouldn’t push for a coordinated messaging campaign, saying “you cannot convince people by spreading around propaganda arguments.”

European officials have pushed to complete the deal by the end of the year, but Juncker said the deadline wouldn’t be met.

“It is not feasible, it will take a bit longer, but it will be done,” Juncker said. “But we have to convince Europeans that it is worthwhile to be done. We are not there.”

Juncker warned against using social media – where opposition has been the fiercest — to draw conclusions on where the broader public stands.

“I am taking into account social media but I am not overestimating social media,” Juncker said. “Don’t consider that those who are feeding social media are representatives for the average public opinion – don’t believe that.”