IMF must clarify its position on pension reforms, Greek FinMin

18 January 2016
823 Views

The International Monetary Fund (IMF) must finally make clear its position on the proposed Greek pension reforms and understand that the negotiations on the review of Greece’s programme cannot continue indefintely, Finance Minister Euclid Tsakalotos said on Monday.

In a press conference with government spokeswoman Olga Gerovassili, Tsakalotos warned the review of the Greek programme must not be allowed to drag on, otherwise the targets will not be met and the country will be unable to make the switch from a vicious to a virtuous cycle of growth.

“It is in the interests of all sides that there should not be a new Greek crisis,” he added.

Tsakalotos noted that the Greek government has no problem with the IMF’s participation in the programme and is meeting the commitments it has made.

“We understand that the IMF has raised the bar high for both the pension reforms and fiscal issues,” he said, adding that the government was prepared to negotiate and discuss.

At the same time, he urged the IMF to clarify whether the objections ostensibly leaked to the press, such as reports that it objects to the proposed pension reforms, are its own leaks or else to officially deny them.

The minister said that the main issues in the negotiation are pension reforms, tax issues and fiscal targets. On the first, he noted that the government had its own lines that it would not cross – such as that pensions could not be cut for the 12th-13th consecutive occasion. He noted that the government was open to discussion and compromise in order for the numbers to work and a solution to be find, provided the IMF was willing to wrap up the discussion in a reasonable amount of time.

He noted that the IMF should understand this and had shown itself opposed to procyclic measures that deepened recession.

Tsakalotos appeared confident that the first review can be wrapped up in three to six weeks, while the negotiation on debt relief could stretch up to three months. Asked if the country had the cash reserves to meet its obligations if the negotiations drag on, the minister answered affirmatively but warned that delays could create a bad climate and set back the country’s economic recovery.

On the additional figures requested by Greece’s partners at the Eurogroup on Thursday, Tsakalotos said these chiefly concerned fiscal data for 2016 and the Medium-Term fiscal programme, including tax income, and actuarial data on pensions, which indicated the viability of the system. He confirmed that the figures on the Medium-Term Fiscal Programme had already been sent to the institutions, and that additional figures will be sent soon.

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