Greece’s lenders spoke hopefully on Thursday of an imminent agreement with the government in Athens on the first bailout review, with Economic and Monetary Affairs Commissioner Pierre Moscovici insisting that it is not necessary for Athens to set out in detail the extra 2 percent of GDP in contingent fiscal measures being demanded by the institutions.
Speaking to journalists in Brussels on Thursday, Moscovici said that Greece does not have to specify the 3.6-billion-euro package of standby measures, even though some creditors appear to be demanding this, but has to concentrate on creating a robust mechanism to make the fiscal interventions if the country is not on course for a primary surplus of 3.5 percent of gross domestic product in 2018.
“We need to have a mechanism which shows very precisely how those measures would be taken if necessary... the mechanism must be legislated by the Greek Parliament, that has to be automatic,” he told a group of correspondents, including Kathimerini’s Eleni Varvitsiotis.
Despite the commissioner’s assertion, it appears that the International Monetary Fund and some eurozone member-states would like Greece to detail the measures now and pass them through Parliament rather than relying on a mechanism that would trigger automatic cuts.
In an interview with public broadcaster ERT on Thursday, Bank of Greece Governor Yannis Stournaras said that his impression is that only the IMF is demanding that the standby measures be agreed in detail now.
A brief statement issued on Thursday by the quartet of lenders did not give any further information on the effort to reach a compromise over the contingent measures but indicated that a deal is getting closer.
“The institutions and the Greek authorities have made important progress on a policy package that could pave the way for discussions on debt sustainability and the conclusion of the first review of the third Greek program,” the statement said.
“All institutions will continue to work from headquarters with the authorities and member-states on the final elements of an overall policy package.”
Moscovici said that Greece and its creditors are “99 percent of the way there” in agreeing the basic package of 3 percent of GDP in fiscal interventions, leaving only the standby measures to be settled.
“We should conclude this review as soon as possible,” he said. “Further delay would be bad for the Greek economy.”
Meanwhile, US Ambassador in Athens David Pearce issued a statement insisting Washington’s position that Greece needs a combination of economic reforms and debt relief to overcome its crisis has not changed.
“We have stated repeatedly that Greece needs significant debt relief and must continue structural reforms that will return Greece to growth,” he said.
“We have also stated repeatedly our support for the IMF’s call for Greeks to carry out structural reforms and for meaningful debt relief.
We continue to encourage Europe, the IMF and Greece to accelerate their efforts to conclude the review and agree on meaningful debt relief for Greece in a timely manner.”