Creditors’ Teams Leave Greece Without Any Progress in Talks

Tuesday, March 7th, 2017
Last Update: 12:52

Creditors’ representatives are to leave Athens on Tuesday after a week of fruitless talks on Greece’s bailout program review.

A last meeting between the two negotiating teams will take place on Tuesday morning but it is unlikely that any progress will be made at the last minute, as the atmosphere is very heavy. Thereby the chances of the two sides coming to a staff level agreement before the March 20 Eurogroup are very slim.

Greece lost a big part of its bargaining power as the ELSTAT statistics released on Monday showed the economy declining by 1.1 percent in the fourth quarter of 2016 compared to 2015 and 1.2 percent down from the third quarter, despite speculation for lower figures.

The International Monetary Fund insists that there is a gap in the 2019 budget and asks for measures amounting to 3.6 billion euros (or 2 percent of GDP). The Greek side resists the demand on the claim that the Fund’s estimates are too pessimistic.

Furthermore, lenders seem reluctant to accept the countermeasures Athens is proposing on the grounds that they are based on projections and not actual fiscal figures. The IMF argues that the countermeasures aim at welfare benefits and not at economic development.

The two sides failed to bridge the gap on the thorny issues, such as the level of pension cuts, labor market reforms, settlement of nonperforming loans and the tax-free threshold for low incomes.

Greek government officials attribute the stalling of negotiations on the hard stance kept by the IMF. Addressing his cabinet on Monday, Prime Minister Alexis Tsipras accused the Fund — without naming it — of putting obstacles in talks.

Nevertheless, on Monday evening, after the end of talks, a government official said on SKAI radio that it is feasible that there will be an agreement to close the bailout program review in the March 20 Eurogroup.

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