Creditors put more pressure on Greece

Creditors put more pressure on Greece

ERIC MAURICE

Two years after a crisis that led Greece to the brink of leaving the eurozone pressure from creditors is again mounting, this time to adopt austerity measures or see the end of the bailout programme.

Eurozone ministers have asked the Greek government to present measures ensuring budget targets set for 2018 and the following years will be respected.

EU finance commissioner Pierre Moscovici said after a Eurogroup meeting on Thursday (26 January) that a “global agreement” was needed, that includes “a mechanism to reassure all stakeholders about Greece’s commitment for budgetary seriousness after the end of the programme”.

INSERT

The EU and the IMF “have encouraged” Greece to “accelerate the work”, Eurogroup president Jeroen Dijsselbloem said. (Photo: Council of the EU)

These additional measures are required by the International Monetary Fund (IMF) as a condition to remain in the programme and were endorsed by the EU.

The IMF is also needed to conclude the second review of the programme, agreed in 2015, running until 2018. An agreement on the review would unlock a new tranche of financial aid for Greece.

Eurogroup president Jeroen Dijsselbloem said that the IMF’s presence in the programme was “not negotiable at this point”.

The creditor institutions – the IMF, the European Commission, the European Central Bank and the European Stability Mechanism – asked the Greek government to design further measures on the labour market, pensions and tax that would guarantee that it reaches 3.5-percent primary budget surplus required by the bailout programme.

“We have encouraged them to accelerate that work,” Eurogroup president Jeroen Dijsselbloem said after the meeting, adding that “a quick finalisation of the second review is in everyone’s interest”. But Greece and its creditors did not make much progress on Thursday.

Greek finance minister Euclid Tsakalotos came to Brussels with two letters outlining proposals, but creditors said they were insufficient. As a consequence, the creditors’ experts can still not go back to Athens to prepare the second review agreement.

About a third of the review’s requirement have been dealt with and another third will be “in the coming weeks”, Dijsselbloem explained, adding that “the last ones are always the hardest”.

One roadblock, in addition to the extent of the measures demanded by the IMF, is whether the Greek government should pass them through parliament now to be implemented when needed, or just commit to acting on them if the deficit goes off track in 2018 or after.

‘Not reasonable’

French minister Michel Sapin told journalists that asking Greece to legislate new austerity measures as a precondition was “not reasonable” because Tsipras was “politically not able to do that”.

“It is legitimate to ask to describe what measures he [Tsipras] would take, but it is not useful and may be politically negative, to ask him to legislate,” Sapin said, implying he was almost alone in making that point.

Moscovici told EUobserver that he hoped all parties would soon agree on the conditions of the mission’s return to Athens, in order to prepare a deal for the next Eurogroup on 20 February.

EU officials are concerned that the February meeting is the last opportunity to find a political agreement before election campaigns in Netherlands, France and Germany this year.

Yet Greece is facing another deadline in July when a series of loan repayments come due.

The Greek government and its prime minister Alexis Tsipras are now under pressure.

CONTINUE READING HERE

ER recommends other articles by EUobserver

About the author

Eric Maurice is a staff writer at EUobserver

Join UsFind out about our great (WOW) TLB Project Membership package and benefits, add your voice and help us to change the world!

 

Be the first to comment

Leave a Reply

Your email address will not be published.


*