Creditors turn up pressure, demand legislation of reforms

27 January 2017
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Eurozone finance ministers turned the heat up on Athens on Thursday, demanding that it legislates measures now for the period after 2018, when the country’s bailout ends, dashing the government’s hopes of a swift conclusion to the second review of its third bailout.

The Eurogroup in Brussels, which the government hoped would pave the way for the return to Athens of the representatives of the country’s quartet of creditors to continue talks, was held just two days after the emphatic refusal by Prime Minister Alexis Tsipras to enact any further measures now.

Finance Minister Euclid Tsakalotos said the demands by the International Monetary Fund went “well beyond the European framework of democracy.”

“It’s not correct to ask a country in a program to legislate two to three years beforehand what it will do in 2019,” he said after the Eurogroup.

Moreover, what is worrisome for the leftist-led government is that Greece appears to have lost the support of the European Commission, which aligned itself with the demands made by the IMF and German Finance Minister Wolfgang Schaeuble for Athens to legislate measures now for the period after 2018.

However, Eurogroup chief Jeroen Dijsselbloem said that completing the review is “in everybody’s interest,” adding that Greece’s creditors remain committed to continuing talks, and that eurozone finance ministers want to expedite procedures that will allow creditor representatives to return to Athens “as quick as possible.”

The good news, he said, was that the Greek economy is recovering fiscally, and that state revenues were higher than expected.

Greece and the institutions, he added, are committed to reaching a staff-level agreement.

Economic Affairs Commissioner Pierre Moscovisi struck a similar tone, saying there was “a good discussion about Greece,” adding that contacts must continue and that a conclusion of the review is not far off.

Before the meeting, Dijsselbloem dismissed speculation that the IMF will no longer be involved in the Greek bailout, saying that it plans to be a full participant. “I spoke to [IMF Managing Director Christine] Lagarde quite recently and she reassured me that the IMF has still strong intentions to remain part of the program and to take that step and to participate in the program in full,” he said.

The IMF has insisted that Greece will never achieve its fiscal targets under current budget plans without substantial debt relief.

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