“Pierre Moscovici: We are 99 percent of the way there, we have converged on almost all aspects” – EU officials: “No additional package of measures will be asked”
Athens.- (ANA-MPA, Reuters, EurActiv)
Greece and its international lenders are close to a deal on a package of bailout reforms and are working to agree further contingency steps by May 9 when an extraordinary meeting of euro zone finance ministers will be held in Brussels, EU officials said on Thursday. Following Prime Minister Alexis Tsipras’ telephone conversation with European Council President Donald Tusk and his warning that if a Eurogroup meeting is not held, he will request a Eurozone summit meeting, there was a spurt of activity in Brussels, Paris, Amsterdam and Berlin, according to exclusive information of ANA-MPA on Thursday.
Tusk started a marathon of consultations with Germany reacting negatively to a possible Council meeting and France stating it will support Tsipras’ proposal if there’s no positive development soon with a Eurogroup.
European Commission President, Jean-Claude Juncker, reassured Tsipras in a phone conversation on Wednesday evening saying he will take initiatives so that a Eurogroup meeting is held soon and that it includes talks on debt relief.
Tsipras also had a telephone conversation with U.S. Secretary of Treasury Jacob Lew. According to a Treasury spokesperson, “Secretary Lew and Prime Minister Tsipras discussed the importance of Greece, the IMF, and European institutions constructively working together to conclude the first review of Greece’s economic reform program and find a sustainable path forward in a timely manner. The Secretary underscored the importance of Europe following through on its commitment to put Greece’s debt on a sustainable path through meaningful debt relief, adding that all parties need to be flexible to successfully conclude the negotiations”.
There will be an “additional eurogroup on Greece on Monday 9 May at 3 p.m. in Brussels,” the spokesman of euro zone finance ministers’ chairman Jeroen Dijsselbloem said late on Thursday in a tweet.
Talks between Greece and its lenders have almost reached a conclusion on reforms agreed within the current bailout program, while more negotiations are needed on further contingency measures that Athens must commit to in exchange for debt relief negotiations.
“We are 99 percent of the way there, we have converged on almost all aspects,” European Commissioner for Economic and Financial Affairs Pierre Moscovici said on Thursday on the original reform package, which includes a pension and income tax reform, a way to deal with bad loans and setting up a privatization fund.
“As for the contingency mechanism, which in our view is not really justified by data but politically necessary, let’s work on that,” he added.
The work is expected to be concluded by May 9 when euro zone finance ministers will hold an extraordinary meeting to discuss progress on Greece.
Euro zone finance ministers had been due to meet on Thursday to sign off on the deal with Athens and discuss Greek debt relief, but the meeting was canceled because of insufficient progress.
The main sticking point is on the contingency measures that euro zone finance ministers requested last week, in addition to the reform package already agreed with Athens.
The original reform set is to generate 3 percent of GDP savings for Greece.
But because of a difference in forecasts of Greece’s primary surplus in 2018 between euro zone lenders and the International Monetary Fund, euro zone ministers asked Greece last Friday to prepare a set of contingency steps to be implemented only if Athens misses targets.
The contingency package which is to provide 2 percent of GDP savings – the difference between the IMF and euro zone forecasts – has to be legislated up-front and kick in automatically if Greece does not meet targets.
Greece argues that its laws do not allow it to pass contingency laws and offered to legislate an automatic mechanism for across-the-board spending cuts if it falls short of goals.
“This deserves to be looked at, given due consideration,” Moscovici said.
“We have a few proposals on the table, which go in that direction, but we need to work on that,” he said, adding that the mechanism of contingency steps had to be compatible with Greek laws.
The leader of the European Socialists at the European Parliament,Gianni Pittella, in an interview to the EurActiv showed solidarity to Greece and blamed the IMF.
“The situation with Greece is getting dramatic. Prime Minister Alexis Tsipras has asked for an extraordinary EU summit. There seem to be big questions around the role of the IMF, and the games it has been playing, including ideological attacks against the Syriza government. What is your analysis?
This is a sequel of a movie we watched one year ago, with the same actors. On the one side, the IMF, on the other, the German hawks Schäuble-style, who try to use inappropriate weapons to destroy a democratically elected government and a nation that is making big efforts, both in the economic and financial areas, and in tackling the refugee crisis.”