Prospects for deal in bailout talks get more distant

10 March 2017
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After yet another round of inconclusive bailout talks in Athens, Prime Minister Alexis Tsipras said he believed a comprehensive deal with creditors could be reached by April while taking a dig at the International Monetary Fund over its tough stance on labor rights.

In comments to reporters at the end of a summit of European Union leaders in Brussels, Tsipras said he believed a technical-level agreement could still be reached in time for a March 20 Eurogroup, with a broader accord, including the specification of medium-term debt relief measures, coming in April.

Tsipras indicated, however, that tough talks on collective wage bargaining would be harder to conclude. “That issue can’t be solved at the technical level. There’s a disagreement,” he said, adding that the IMF must understand that Greece is a European country and that non-European labor models cannot be imposed on it.

In a related development, IMF chief Christine Lagarde said Tsipras asked the Fund “to stand by Greece” in its third bailout program.

“To commit to Greece, as the Greek prime minister has requested, in addition to reforms, the debt should be sustainable,” Lagarde told French newspaper Le Parisien in an interview.

“This requires restructuring, which could be done through various actions such as a significant lengthening of repayment, or with very low ceilings in interest rates,” she said, noting that the Fund is trying to convince Greece’s European creditors of the need to restructure the country’s debt.

Questioned about his comments to Lagarde, Tsipras offered reporters a clarification. “I asked for the Fund’s commitment that its presence would not be ‘a la carte,’ just with measures, but also for the debt, where the tactic of the Europeans is to kick the can down the road,” he said.

According to Bloomberg, the IMF is moving toward backing Greece’s third bailout. The Fund is said to be ready to bolster the program with between 3 and 6 billion US dollars (or between 2.8 and 5.6 billion euros), compared with a 31-billion-dollar (29-billion-euro) credit line under Greece’s second bailout in 2012.

In a separate interview with Bloomberg, opposition New Democracy leader Kyriakos Mitsotakis repeated that his conservative party would not back further austerity measures that Greece’s creditors want to be legislated now and enforced at the end of the program, as of 2019.

Mitsotakis said his conservative party had repeatedly criticized the government for failing to implement structural reforms and “take ownership” of the program but also slammed the creditors for “excessive fiscal measures.”

While in Brussels, Tsipras also had talks with German Chancellor Angela Merkel, telling reporters later that the German leader was “extremely, maybe even worryingly, optimistic” about the prospects for a swift conclusion to the bailout review.

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