Greece-Creditors Still Fail to Close Gap in Bailout Review Negotiations

Monday, March 6th, 2017
Last Update: 13:40

Greece and international creditors continue to disagree on several issues of the bailout program as Sunday’s talks failed to bridge the gap between the two sides.

Lenders, and the International Monetary Fund in particular, insist on the need of reforms in the labor market, changes in the pension system, lowering of the tax-free threshold and the need for additional measures to close the fiscal gap in the 2019 budget.

Specifically, creditors persist on the issues of higher percentages in mass layoffs, disagree on the return of collective bargaining and ask for changes in union laws.

Regarding pensions, the two sides disagree on the percentage of state funding to security funds.

Lenders also believe that the tax exemption threshold should be much lower as almost half of Greeks pay no income tax whatsoever and the overall tax base is very small.

Also, creditors want Greece to legislate measures amounting to 2% of gross domestic product (3.6 billion euros approximately) in order for the 2019 budget targets to be met.

The Greek side disagrees on all issues, and on Monday the technical cadres of the two sides will meet again in an effort to bridge the differences so that Finance Minister Euclid Tsakalotos and Labor Minister Efi Achtsioglou can meet with the heads of missions later in the day and continue negotiations.

The lenders’ representatives are scheduled to depart from Athens on Thursday and it is unlikely that there will be significant progress in talks by then. This means that this week’s Euro Working Group will assess that there is no progress in negotiations and there will only be a mention of the Greek issue during the March 20 Eurogroup.

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