Focus turns to debt talks, Athens banks on encouraging fiscal data

19 April 2017
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Following the brief Easter break, Greek officials are preparing to head to Washington for talks with the country’s lenders that Athens hopes will contribute to a so-called “global” agreement, including debt relief, being clinched in the coming weeks.

Finance Minister Euclid Tsakalotos, his alternate Giorgos Houliarakis and Economy Minister Dimitris Papadimitriou are due to travel to the US capital on Thursday night for the International Monetary Fund’s Spring Meetings, running Friday to Sunday.

The delegation will travel with the advantage of knowing the ratified primary surplus for 2016. Greek government sources indicated there is confidence in Athens that the final official fiscal data will show a primary surplus of around 4 percent of gross domestic product last year, which would be some 3.5 percentage points above the target agreed with the creditors.

Athens hopes that this positive outcome will facilitate the discussion expected to take place at the sidelines of the gathering hosted by the IMF and that the institutions will reach an understanding on how to put Greece’s public debt on path to sustainability.

In an interview with German newspaper Die Welt published on Tuesday, IMF Managing Director Christine Lagarde reiterated the Fund’s position on Greek debt. “If Greek debt is not sustainable based on IMF rules and reasonable parameters, we will not take part in the program,” she warned.

Germany’s position on this issue is considered to be pivotal, particularly because of the political constraints on the government in Berline due to the federal elections scheduled for September.

Before the debt issue is officially settled, though, there will have to be an agreement between Athens and the institutions at a technical level on the measures that the Greek government will have to implement. The lenders are due to return to Greece on Monday to conclude the so-called staff-level agreement. The coalition is hopeful that this can be done in a few days, as it believes that just some minor issues still need to be resolved.

Athens continues to believe that a comprehensive agreement can be reached by the May 22 Eurogroup.

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