Institutions in deadlock over review of bailout

Institutions in deadlock over review of bailout

The European Commission is making efforts to bridge the gap between Greece and its lenders, as well as between the institutions themselves in an effort to get the bailout review going again.

Kathimerini understands there is a possibility the the heads of the mission representing Greece’s European lenders may return to Athens this week but this probably will not be the case for the International Monetary Fund as there is still a substantial difference between its estimate for the country’s fiscal gap and what the other institutions believe.

The Fund is sticking by its forecast for a fiscal gap of up to 5 percent of gross domestic product, or 9 billion euros, until 2018. In contrast, the Commission, as well as the European Central Bank, see the shortfall as being closer to 3 percent of GDP.

The Greek government concurs with this point of view. The tax and pension reforms it has proposed total around 1.5 percent of GDP, while it has also lined up fiscal measures totaling 0.5 percent. This, in Athens’s view, leaves a gap of 1 percent of GDP, or roughly 1.5 billion euros, to cover over the next three years.

The technical teams sent to Athens by the lenders have spent the last few days discussing the measures the government proposes to adopt to cover the gap in question.

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