Greece bailout plan still lacking, ECB chief Mario Draghi says

Greece needs to urgently do much more to present an acceptable plan to gain further EU financing, European Central Bank chief Mario Draghi says.

With the clock ticking on Greek negotiations with the European Union for the release of another 7.2 billion euros bailout funds, Draghi said Greece’s framework for bailout financing going ahead is still lacking.

He said Athens must come up with a framework that can be used by creditors to assess the impact of any of its domestic policy proposals.

“More work, much more work is needed now and it’s urgent,” he said in Washington, on the side of the spring IMF-World Bank meetings.

“We all want Greece to succeed. The answer is in the hands of the Greek government.”

Greek negotiators met in Paris on Saturday with representatives of the European Union, the European Central Bank and the International Monetary Fund, to try to work out a deal ahead of the April 24 meeting of the Eurogroup finance ministers in Riga, Latvia.

The Greek government needs new financing urgently to pay salaries at the end of the month and then make a series of debt payments to the International Monetary Fund and the ECB over the next three months.

While part of the talks have focused on how much more belt-tightening and reforms Athens needs to undertake in exchange for EU funding, Draghi said what is lacking is a framework to assess how policy changes will affect the country’s fiscal balance and debt sustainability going forward.

He said the framework had to measure the policy impact on economic growth, fairness, fiscal stability and financial stability.

“Any government is free to choose what they can do,” he said.

“We have to have an overall framework … we have to have a methodology in place whereby which we can assess the quantitative impact, the fiscal impact of these proposals.

“At this point in time, [that] is to have in place a framework that allows a well-informed political discussion by the Eurogroup and the Greek government.”

When asked if Greece could default on its huge debt, Draghi replied: “I don’t want to even contemplate such an event … the Greek leaders repeatedly state that they want to honor all their obligations”.


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