The Brussels Group is reportedly examining the possibility of relaxing Greece’s primary surplus goals, from 3% GDP to a more realistic 0.6% surplus for 2015 (3.5% for 2017) and 1% growth. The IMF has also pressured for further cuts in pensions.
Greece’s creditors are examining a milder approach, with a lower surplus for 2015, but they insist upon equivalent measures for all measures that do not have a neutral budgetary outcome. This means that the government would have to demonstrate how it will cover for its ambitious 200-million-euro program for the humanitarian crisis.
Meanwhile, the MF is insisting upon harsher (and unacceptable) measures, such as further cuts in pensions and the complete abolition of early retirements. Both Greece and its European partners object to this, arguing that a reevaluation of the pension system’s parameters would be preferable, over fragmentary interventions.
Furthermore, the IMF insists upon the completion of the program review and that the new agreement must include everything remaining in the old bailout agreement, which has yet to be implemented. As such, the IMF is against the “merging” of procedures and demands that the review be complete, before a new deal is singed. It remains to be seen whether the European side will fall in line with the IMF, as it has over the past few years, for political purposes.
Possibility of a statement
A creditor source participating in the discussions has told To Vima that the atmosphere has improved and that there has been progress in certain issues. The source was quick to point out that there were significant differences on critical issues, such as the budget, pensions, labor relations and privatizations.
Nevertheless, the source was optimistic that a joint statement which recognizes the progress achieved so far is possible, ahead of the Eurogroup arranged for the 11th of May. Even if this were to occur though, the source stresses that a lot of work remains on difficult issues that need to be addressed.
Another source however is not as optimistic and claimed that the Greek side has to make further moves, which it has not yet made. This source also reported that the optimistic messages of late do not reflect reality.
