Lenders split over path ahead for Greece

Lenders split over path ahead for Greece

A high-ranking EU official told Kathimerini on Wednesday that the only way Athens will complete the review of its bailout and unlock a tranche of rescue funds is to implement reforms, legislate contingency measures and complete talks on debt relief, which must also be approved by some parliaments in eurozone member states. He added that Greece will only have to implement contingency measures if it fails to meet its budget targets over the next three years.

Greece has said it may agree to implement further measures but not now, as demanded by the International Monetary Fund (IMF) and the European Commission last weekend.

The official’s remarks reflect growing disagreement between Greece’s lenders over the way forward to complete the review.

European Commission Chief Jean-Claude Juncker struck a different tone on Wednesday, saying that Athens should not need extra measures to complete the ongoing review.

The root of this disagreement lies in the different outlook maintained by the IMF and the Commission over Greece’s fiscal performance and growth forecast over the next three years.

“We, as the Commission, are of the opinion that our figures are right and there is no need for contingency measures,” Juncker said in an interview with financial website made public on Wednesday. He added that “my impression is that the IMF does not believe in our figures.”

His remarks came ahead of Thursday’s expected announcement by the Hellenic Statistical Authority (ELSTAT) – reportedly in agreement with the Commission’s statistical arm, Eurostat – that the country’s primary budget surplus in 2015 was between 0.6 to 0.7 percent of GDP.

Greece is banking that these figures will help its case that more measures are not needed to complete the review. The IMF, however, disagrees based on its assumptions that Greece had a .05 deficit last year.

According to the official, the demand that Greece legislates contingency measures was made by the IMF because it mistrusts the Greek government due to its poor track record on implementing agreed measures.

Commission sources also told Kathimerini that if progress is made over the coming days in the negotiations then an extraordinary Eurogroup could, possibly, be on the cards before Easter.

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