Greek FinMin Meets With Creditors to Unlock Talks on Bailout Program Review

Friday, February 10th, 2017
Last Update: 11:03
Greek Finance Minister Euclid Tsakalotos will meet with creditors’ representatives in Brussels on Friday to receive their proposals in a last minute effort to unlock negotiations on the bailout program review. The evening meeting is an initiative of Eurogroup President Jeroen Dijsselbloem, after talks between the two sides have stalled for almost two months. The reasons are Greece’s failure to fulfill several bailout program obligations and the disagreement between European institutions and the International Monetary Fund over Greek debt sustainability and fiscal targets.

European Central Bank executive Benoit Coeuré, European Stability Mechanism President Klaus Regling, European Commissioner on financial affairs Pierre Moscovici and IMF Director of the European Department Poul Thomsen will present their proposals to Tsakalotos.

The meeting will attempt to bridge the differences between Greece and institutions and differences between European creditors and the IMF. The participants will try to find the right balance of measures so that Greece will agree to implement them and the IMF would agree to participate in the bailout program.

 The measures will include labor law reforms, lowering the tax-free threshold, liberalization of the energy market and changes in the pension system. Athens will be asked to legislate contingency fiscal measures in advance. Reportedly, creditors will ask for additional fiscal measures worth 2% of GDP, approximately 3.6 billion euros, in order to resume talks. The clock is ticking for Greece as the upcoming elections in the Netherlands in March will shift the focus in Europe and the Greek issue will take the back seat. The deadline for Athens is the February 20 meeting of euro zone finance ministers, in which the Greek government hopes to get at least a staff level agreement for closing the bailout program evaluation.

Greek deputy finance minister: Agreement before elections in Europe

Deputy Finance Minister Giorgos Chouliarakis spoke at the London School of Economics on Thursday where he expressed his concern over the timely completion of the bailout program review.

“It is better to close negotiations before the elections in the Netherlands, France and Germany,” he said, according to Reuters.

“There is a good reason to conclude the negotiations as soon as possible than to await the results of the elections in Europe,” Chouliarakis added.

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