BUSINESS

Time for deal with Greece's creditors is running short

SOTIRIS NIKAS

Declan Costello, the European Commission's chief representative in Athens

TAGS: Finance

The government is striving to find common ground with the country’s creditors on measures worth 3 percent of Greece’s gross domestic product, or 5.4 billion euros, before the Eurogroup meeting on April 22, so as to have completed its part of the deal with the eurozone and the International Monetary Fund in time. However, just days before the creditors’ mission chiefs return to Athens to resume negotiations, the situation appears particularly difficult given the tight timetable.

Sources say that the IMF is refusing to budge on its opinion that the budget gap up to 2018 amounts to 4.5 percent of GDP, meaning that measures worth 3 percent of GDP – agreed with the European Commission – are not sufficient. The Fund is expected to ask the Eurogroup for the difference of some 2.7 billion euros to be covered through measures to lighten the Greek state debt, with the outcome of such a debate unknown for now.

On Wednesday the Commission’s top representative in Athens, Declan Costello, came to Greece for a quick visit and is said to have spoken of “serious indications that everything could be closed before the April 22 Eurogroup. Then the reprofiling of the debt can take place,” adding that “these two will help the economy rebound.”

SYRIZA MEP Dimitris Papadimoulis said that in his meeting with Costello on Wednesday, “he gave us an optimistic message that is it totally possible for the negotiations to be completed by the end of [April], and that the remaining differences between the three European institutions and the Greek government can be bridged.” He also stressed that “the IMF wants a deal and has stopped asking for things beyond the agreement reached last summer.”

For the deal to be closed, however, the agreement on the measures will not be enough: The two sides must also agree on the handling of nonperforming loans and the creation of the new privatization fund. Sources say that NPLs represent the biggest obstacle, while sources from both sides fear an agreement may not be reached in time for the April 22 Eurogroup.

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