ECONOMY

IMF board member proposes compromise deal for Greek bailout talks

WASHINGTON – Reaching a compromise that allows all sides to claim victory and success is the key in the current stand-off between Greece and its lenders, according to Brazilian economist Paulo Nogueira Batista, executive director of the International Monetary Fund.

Batista, who represents 11 developing countries, including his native Brazil, presented a series of proposals regarding the Greek issue at an IMF executive board meeting last Monday.  

His plan foresees an interim, partial solution based on small-scale primary surpluses, selected reforms and sufficient details on how to achieve them. In exchange, creditors would provide a 4-6 month extension with regard to ongoing negotiations over the bailout program, immediately make funding available for the country to cover its obligations toward the IMF and the European Central Bank as well as making a pledge regarding future debt relief for Greece. 

Speaking to Kathimerini in his capacity as an economist, Batista noted that although a sustainable fiscal policy along with certain structural changes to the Greek economy where clearly necessary, the question was how much additional fiscal adjustment the country could withstand. He also wondered what types of structural reforms were advisable and «consistent with the mandate that the Greek government received from the electorate.»

For a partial deal to be achieved said Batista, Greece should “lay out its plans for a partial fiscal/structural package that would include measures such as reforms of public sector management, fight against tax evasion, strengthening of tax administration, a few privatizations, and some perhaps less controversial measures in terms of product market reforms and pension plan reform.”