Disagreements between the International Monetary Fund (IMF) and Athens’s European Union lenders over additional reforms Greece must implement to achieve its fiscal targets in 2018 are delaying the first review of its latest bailout, a hurdle the Greeks desperately need to clear to open the way for debt relief talks.
However, he said that the lenders’ top representatives are expected to return on Tuesday to Athens, a move that will speed up the beginning of talks on the Greek debt – if Greece complies with the terms of the bailout programme. A successful review will pave the way for discussions on how to reduce Greece’s debt burden and release more bailout cash.
Though the Greek government, which is led by Prime Minister Alexis Tsipras, has delivered much of what’s been asked of it, it has stumbled on one key measure: pension reform.
Dijsselbloem confirmed that the debt discussions could take place soon and will inevitably be part of discussions about the next stage of Greece’s bailout program.
“We have a long-standing promise that if the Greek government fulfils its commitments…we will do what is necessary to make debt service manageable”, Dijsselbloem told the same news conference.
But some of Greece’s creditors, notably the International Monetary Fund, don’t think the Greek government’s plans go far enough given the country’s parlous financial situation. Just a few hundred meters away from where the finance ministers held their meeting, European leaders met with Turkish government officials on how to deal with the migrant crisis and how to help Greece on that issue.
Also the start of talks on debt relief for Greece, which is to include an extension of maturities, grace periods and some interest rate reductions but no write-off of capital, can only start after a positive review of the reforms, the euro zone has decided.