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  • Final countdown for completion of last bailout evaluation

    While the IMF maintains that the adjustment of debt servicing to economic performance should be automatic, Berlin wants stricter terms and a gradual, piecemeal debt relief that would require approval of the German parliament every step of the way.

    ΤοΒΗΜΑ Team

    Privatisation, energy, and public administration top the agenda for talks in Athens between Greeceand its creditors, as both sides begin a sprint to complete over 80 conditions to complete the fourth and last bailout evaluation by June.

    Among the fiscal issues that will be discussed are the pension cuts planned for January, 2019, which Finance Minister Euclid Tsakalotos has said will be implemented, despite calls from MPs in the ruling SYRIZA party for the government to use part of the primary surplus to cancel the cuts.

    In the week until the 24 May Eurogroup, there will be an effort by the IMF and Berlin to bridge their differences on the form that debt relief for Athens will take.

    Poul Thomsen, the head of the IMF’s European division, told CNBC that time is running out and that it is important to reach agreement by the time of the 24 May Eurogroup meeting.
     
    In line with the French proposal on debt relief, he said that what is needed is a mechanism that offers more debt relief in periods when the Greek economy is not performing well.

    While the IMF maintains that the adjustment of debt servicing to economic performance should be automatic, Berlin wants stricter terms and a gradual, piecemeal debt relief that would require approval of the German parliament every step of the way.

    Right now, the large chasm between Germany and the IMF remains, and many in Athens believe the Fund may not participate in the Greek programme, though European creditors have indicated that they want the IMF to stay on board, to help Greece stay on course.

    International