Greek bailout review set to drag on for months

Greek bailout review set to drag on for months

Athens, January 8, 2016/ Independent Balkan News Agency

By Zacharias Petrou

Eurogroup chief Jeroen Dijsselbloem dealt a blow to the hopes of Greek Prime Minister Alexis Tsipras of excluding the International Monetary Fund (IMF) from the country’s bailout program.

Last month Tsipras publicly urged the IMF not to take part in the third bailout agreed last summer. The Greek PM told the Financial Times he was “puzzled by the unconstructive attitude of the fund on fiscal and financial issues.”

Athens believes the eurozone is now in a position to take full responsibility of supervising Greece. Dijsselbloem, however, told reporters on Thursday that the IMF’s role is crucial. “You cannot have a program without the participation of the IMF. The Fund has the intention to return to the program as a participant and not just as a technical consultant, it intends to take part in the financing” the Eurogroup chief said.

Speaking during a presentation of the Dutch presidency of the European Union, Dijsselbloem said the first review of progress made in the implementation of the Greek bailout program will be difficult and that realism is required.

“I would have liked to speed up the process but unfortunately that is not within my capacity” Dijsselbloem commented. The Dutch Finance Minister also revealed how the review will unfold, stressing that an agreement is required on all the open issues, including social security reform, the new privatizations fund and open fiscal matters for 2017-18, for the process to be completed.

“A positive outcome of that will lead to further disbursements, tranches for Greece, will lead to a debate on debt restructuring, debt-related measures — but that will be the order of things,” Djisselbloem stressed.

Specifically on social security reform, the Eurogroup president revealed he is “hoping for a broad consent but I would never ask [Euclid] Tsakalotos about it.”

While the Greek government awaits the return of creditors in Athens for the bailout review to begin – possibly on January 18 – Finance Minister Euclid Tsakalotos begins a six-day tour of European capital n Friday to promote the country’s debt talks and win support for the Greek pension reform proposal.

Tsakalotos will first travel to Rome for talks with his counterpart Pier Carlo Padoan, and will then visit Lisbon, Paris, Helsinki, Amsterdam and Berlin to see Mario Centeno, Michel Sapin, Alexander Stubb, Jeroen Dijsselbloem and Wolfgang Schaeuble.

“Tsakalotos will discuss the course of the European programme, in view of the first evaluation, as well as the issue of the Greek debt,” the finance ministry said in a statement.

Despite Jeroen Djisselbloem saying it could last months, Athens still hopes to wrap up the bailout review as soon as possible in order for talks on possible debt relief to begin. With thorny issues still unresolved (pension reform, tax hikes for farmers, etc.) analysts point out that the Syriza – ANEL slim majority of 153 in parliament could be threatened.

The government has drawn a red line in cutting main pensions in an attempt to put the fears of MPs to rest. “The creditors have to know that we are going to respect the agreement to the letter, but that doesn’t mean we are going to succumb to unreasonable and undeserved demands,” said in an interview with newspaper Real News.