NEWS

Government, creditors fail to bridge gulf in bailout talks

TAGS: Politics, Economy

Attempts by Greek government officials to bridge a gulf in dragging negotiations with representatives of the country’s international creditors failed to bear fruit on Friday, indicating that a breakthrough in bailout talks may be unlikely until May.

A two-hour conversation, which took place during a teleconference on Friday between several Greek ministers and the mission chiefs to Greece, was tense, according to sources. Finance Minister Euclid Tsakalotos participated in the call, along with Labor and Social Insurance Minister Effie Achtsioglou, Energy Minister Giorgos Stathakis and Alternate Finance Minister Giorgos Houliarakis.

A key point of contention was the issue of energy – Greece’s creditors are pushing for the full liberalization of the market. Bailout monitors repeated their calls for the sale of the Public Power Corporation’s lignite and hydroelectric plants. According to sources, foreign officials were so insistent that Stathakis was forced to refer the matter to Prime Minister Alexis Tsipras.

Efforts will be made over the weekend to reach a compromise on the issue, with the Greek side keen to put off the privatization of PPC plants, a politically contentious reform, until a later date.

The aim is for some common ground to be established ahead of a summit of eurozone finance ministers on Monday. Although Greece is on the official agenda of talks, no breakthrough is expected. What the Greek delegation is hoping for is to get eurozone ministers’ “political” backing for certain thorny issues, chiefly relating to labor market reforms, on which the International Monetary Fund has assumed a tough stance.

According to sources, the two sides failed to bridge their differences on labor reforms too on Friday, with bailout monitors continuing to insist that mass layoffs should be facilitated in the private sector while Greek officials want the revocation of collective bargaining laws.

One foreign official said the creditors are awaiting “strong reassurances” from Tsakalotos on Monday otherwise bailout monitors will not return to Athens to pick up a stalled review.

Meanwhile, as speculation grows that the IMF will end up backing Greece’s third international bailout, conservatives in Congress are pushing US President Donald Trump to block the Fund from participating in Greece’s third bailout, according to the Financial Times.

Conservative Republicans in Congress want Trump to take a hard line and oppose further IMF involvement in Greece, the FT reported.

A bill introduced on Thursday by Bill Huizenga, a Michigan conservative, calls for the Trump administration to oppose any further IMF participation in a Greek bailout.

Should the US fail to achieve that aim, the bill would also require the US to oppose any broader IMF quota reforms until Greece had repaid all of its debts to the IMF.

“The IMF is supposed to be a lender of last resort, not a fig leaf of first resort for eurozone members,” the FT cited Huizenga as saying.

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