Athens aims to finish prior actions, pave way for debt talks

TAGS: Economy, Politics

Following talks with the institutions in Athens last week, the Greek government will now turn its focus to completing the 15 milestones that are needed to unlock the next sub-tranche of bailout funding.

Having failed to make significant progress with the range of reform goals over the summer, Athens now faces a last-minute rush to conclude the legislation needed before the end of the month.

The target has been set by the government rather than the creditors, who appear unconcerned about any delays as Greece does not face any imminent debt payments and the longer it takes to conclude the current round of prior actions, the longer it will be before the sensitive issue of debt relief has to be discussed between the eurozone and the International Monetary Fund.

Greece, on the other hand, wants to tick the milestones – including appointing a supervisory council for the new asset fund and transferring several public organizations (DEKOs) to the nascent organization – off its list as soon as possible so that the debt discussion can begin.

Athens aims to have all the legislation relating to the pending reforms passed through Parliament in the next 10 days so that the Euro Working Group can give the green light for the disbursement of the 2.8-billion-euro bailout installment when it meets on September 29.

The coalition hopes that if this target is met the next bailout review will begin on October 17 and debt relief will be up for discussion.

Another issue that the government wants to debate with the institutions in the coming days is the primary surplus targets for 2018 onward.

The Finance Ministry would like to submit the Medium-Term Fiscal Strategy (MTFS) to Parliament before the end of this month but the creditors have so far refused to discuss the Greek request for the primary surplus target after 2018 to be reduced from the current 3.5 percent of gross domestic product.

According to government sources, Athens proposes two solutions.

One is for the MTFS to include primary surplus targets of 3.5 percent for 2019 and 2020 but for a footnote to stress that these goals could change after 2018.

The other is for two different targets to be included, one for 3.5 percent and they other for 2 to 2.5 percent.