: Reuters — Greece expects to reach an initial agreement with its official creditors at a meeting of euro zone finance ministers on Monday on the fiscal targets and reforms it needs to adopt to conclude its latest bailout review, a government official said on Friday.
Talks on two other aspects of the review, namely debt relief and primary surplus targets after 2018, when Greece’s bailout program ends, are expected to continue, and both issues will probably be discussed at another Eurogroup meeting.
“We believe that all issues will be resolved by the end of December,” the official added.
Greece received 240 billion euros from two earlier bailouts and is due to get 86 billion under the current third program, which is being reviewed for the second time.
It needs to keep passing reviews to continue receiving funds to help pay back its debt which, at about 180 percent of GDP, is the highest in the euro zone.
Athens wants to be included in the European Central Bank’s bond-buying program of quantitative easing by March, the official said. The government has said that this would help Greece return to bond markets at the end of 2017 or early in 2018.
In their discussions on the bailout review, Athens and its European Union and International Monetary Fund lenders are at odds over labour and energy reforms and over the measures needed to plug a projected fiscal gap in 2018.
The EU and the IMF disagree on Greece’s fiscal targets beyond 2018.
The IMF, which has yet to decide whether it will participate in Greece’s bailout program financially, says Greece cannot achieve its medium-term target for a primary surplus of 3.5 percent of GDP unless it is granted significant debt relief and adopts extra austerity measures.
To approve the target after 2018, the IMF wants Athens to legislate now for cuts in pension spending and to reduce its tax-free threshold for after 2018, the official said.
This will effectively force Athens to agree a fourth memorandum but without having any of the favourable interest loans to repay its creditors. It remains to be seen how these new measures will be enforced and monitored by the creditors if Greece will be able to borrow from the money markets and does no longer depend on the institutions for servicing its loans.
Government spokesman Dimitris Tzanakopoulos said this week that Greece cannot accept more austerity after 2018, but in the event the government might have to give in to pressure from the institutions if a debt reduction deal is on offer.
