Eurozone ministers seek to end Greece bailout row

7 March 2016
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Eurozone finance ministers met Monday to defuse a bitter rift between top EU and IMF officials over how strictly to hold Greece to the ambitious reform commitments made as part of its bailout.

The eurozone’s 19 ministers are meeting in Brussels just as EU leaders and Turkey hold talks next door to discuss the refugee crisis, in which Greece is also a sensitive focal point.

Jeroen Dijsselbloem, the head of the Eurogroup of eurozone finance ministers, warned against Greece driving a wedge between the Europeans and the IMF over the scale of the required reforms.

“Let me make quite clear that we need credible, sustainable pension reforms and the budget needs to be on track,” said Dijsselbloem, who is also Dutch finance minister.

“That is not something that only concerns the IMF, it is something that concerns all the institutions and the Eurogroup,” he said.

The conflict pits the Washington-based IMF against the European administrators of the bailout program: these include the EU’s rescue fund the European Stability Mechanism, the European Central Bank and the European Commission.

The institutions are clashing over their assessment of the current state of the Greek economy, with the IMF worried that estimates drawn up by the EU and Greece do not add up.

“The institutions have to show that they share the same point of view,” said Pierre Moscovici, the European Economic Affairs Commissioner, as he arrived for the talks, referring to the organiztaions that oversee Greece’s bailout.

Greek Prime Minister Alexis Tsipras on Sunday accused the IMF of employing “stalling tactics” and “arbitrary” estimates to delay a reforms review crucial to unlock further bailout cash.

The leftist PM said the global lender was bent on unfair cuts that failed to take into account the improved performance of Greece’s economy.

The IMF has yet to officially sign onto the third bailout of Greece and is making its participation conditional on the fact that no ground is yielded on the reforms needed by Athens, especially on pensions.

But the negotiations with the Christine Lagarde-led institution are complicated by the fact the IMF also encourages debt relief for Athens, a measure that most eurozone countries are loath to accept, especially powerful Germany.

This opposition however puts Berlin in an uncomfortable position as Chancellor Angela Merkel needs Greece support to ease the refugee crisis, with tens of thousands of asylum seekers near the Greek borders hoping to make their way to Germany.

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