Lenders extend Athens consultations on bailout review

7 March 2017
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International creditors have extended talks in Athens on more reforms to unlock bailout aid after some progress in talks, sources close to the process said on Tuesday.

Greek sources had earlier said representatives of European institutions and the International Monetary Fund were due to wrap up a week of consultations later on Tuesday.

“Some progress was made yesterday so they will try to take it the furthest possible,” one source close to the lenders said, requesting anonymity. The source declined to comment further.

A review on Greece’s bailout progress has dragged on for months, reviving fears of a new financial crisis in the eurozone as investors’ nerves are jarred by unpredictable elections in the Netherlands, France and Germany.

Athens and its foreign creditors – eurozone member states and the International Monetary Fund – agreed on February 20 to resume talks on Greece’s long-stalled bailout review, but only after Greece accepted to examine reforms for 2019 onwards.

Lenders have sought further reforms to pensions and tax credits, arguing that the present system is based on a relatively small number of taxpayers supporting a large contingent of pensioners.

Greece has agreed to discuss additional measures the equivalent to two percent of its gross domestic product, or worth 3.8 billion euros.

However, it says that is contingent on introducing relief measures of the same value, netting its fiscal impact on a population already worn down by three bailouts, heavy taxation and the highest unemployment rate in the euro zone.

Greece has debt repayments of 7.2 billion euros due in the summer. Lenders, who are extending a credit line of 86 billion euros to Athens, need to sign off on a review of bailout progress before releasing new funds.

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