After Eurogroup disappointment, Athens seeks to make case against measures beyond 2018

31 January 2017
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After the results of last week’s Eurogroup effectively took the wind out of the government’s sails, the prime minister’s aides say Athens has now entered a “phase of reflection” as it strives to break the deadlock in the negotiations to wrap up the second review of the country’s third bailout.

The government is reportedly still confident that it can conclude the review by February 20. But aides to Prime Minister Alexis Tsipras insist that his leftist-led administration will not legislate new measures now for the period beyond 2018 when the country’s current bailout ends – despite the demand by international creditors at the Eurogroup last Thursday.

Ahead of Friday’s informal meeting of European Union heads of state in Malta, Tsipras and Finance Minister Euclid Tsakalotos are embarking on a communication offensive this week to argue the country’s case that new measures now are not necessary as Greece will meet its fiscal targets.

Athens argues that, rather than legislating measures now, it is open to extending a contingency mechanism to ensure it will meet fiscal targets beyond 2018.

Meanwhile, the government appears resigned to the fact that the target of a 3.5 percent budget surplus will remain after the bailout expires in 2018, and for this reason it is demanding more specifics from the eurozone with regard to debt relief measures the Eurogroup decided in December.

What is clear is that the coalition goverment is keen to defuse the tension with the country’s creditors as it is conducive to a climate of economic uncertainty and political instability, which has sparked talk of snap elections, or even a referendum, among several lawmakers of ruling SYRIZA.

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