(WN)Euro zone finance ministers will discuss on
Monday what reforms Greece must make to release new loans from the bloc's
governments and get the International Monetary Fund to join the bailout.
If the ministers reach an agreement, they
will dispatch to Athens a mission of experts from the European Commission, the
European Central Bank, the euro zone bailout fund ESM and the IMF to complete a
review of the needed reforms.
"Today we will just discuss getting the
mission of the institutions back to Athens and that requires agreement on
substantial reforms and additional measures to be taken," the chairman of
euro zone ministers Jeroen Dijsselbloem said.
The last such mission broke down in acrimony
in December over differences as to what still needed to be done and how to
ensure Greece meets agreed fiscal targets in the years to come.
Talks on how to proceed have been dragging on
since then and now appear set to continue during election campaigns in the
Netherlands and France, which euro zone officials have said may make a deal
more difficult.
But Belgian Finance Minister Johan Van
Overtveldt said on entering the meeting that a deal with Greece should not be
rushed because of the European election calendar, especially as Greece did not
face major financing needs until July, when it has to repay 7.2 billion euros
in maturing debt.
"Of course elections may always pose a
problem when trying to get good decisions but on the other end, we shouldn't
take... half-baked solutions because elections are coming up," he said. Until
July Greece has enough money to get by, ministers said, so there was no reason
to talk about a new crisis.
A stalemate in reform talks between the
lenders and Greece in 2015 led to a default on the IMF by Greece and the
introduction of capital controls to prevent Greeks from taking their savings
out of the country.
***Differences
Remain***
But an agreement with Greece on what reforms
still need to be completed is made more difficult by differences between the
lenders themselves euro zone governments and the International Monetary Fund. The
IMF says that with the reforms agreed now, Greece cannot reach and maintain a
primary surplus of 3.5 percent of Gross Domestic Product from 2018 onwards as
promised to the euro zone.
It insists therefore that either Athens
undertakes further reforms, or the euro zone should agree to lower the primary
surplus target to 1.5 percent of GDP and grant Greece debt relief to make it
sustainable.
Unless the targets and reforms add up, the
IMF says it cannot join the bailout despite insistence from Berlin that it
should. At the same time, Germany says Greece does not need debt relief and
will reach and maintain the agreed surplus targets. "The debt is not the defining problem at
the moment, it is financed in the longer term," German Finance Minister
Wolfgang Schaeuble said, adding: "The IMF will be a part of this
(bailout)."
Schaeuble was backed by Slovakia, whose
finance minister, Peter Kazimir said: "As for our friends from the IMF, we
like them and it's good to have them on board, but I'm not willing to pay any
price for their participation, green-lighting the IMF kind of debt relief–which
Greece does not need."
Dijsselbloem said the issue of any further
debt relief for Greece could only be discussed in 2018 when the bailout ends. "We
will come back to that (debt relief) at the end of the program so at the moment
we need to concentrate on these deep reforms that the IMF quite rightly asks of
the Greek government," he said.
The IMF wants Greece to have more citizens
pay income tax, arguing only half of the workforce was now contributing with
the other half exempt. It also wants Athens to reform pensions, saying the
system was now doubling up as an unemployment benefit system, because Greece
did not have a separate unemployment welfare plan.
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