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EU financial affairs chief says progress made on Greek bailout review talks


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EU financial affairs chief says progress made on Greek bailout review talks

With time running out for Greece to get further essential bailout money, Brussels sent its financial affairs chief to Athens.

EU Economic Commissioner Pierre Moscovici, trying to head off a new financial crisis, met with Greek Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos.

Athens will only get more money if it can satisfy the lenders that it is truly following through on promised reforms and spending cuts.

But the situation is complicated by a split between the EU and the International Monetary Fund over the country’s bailout targets.

Compromise

Moscovici said they are close to an acceptable compromise: “I am confident that if efforts are made by all sides, yes, we can make very good progress and move towards that agreement. When I look at the figures I see that Greece has recovered now.”

But the International Monetary Fund – which is supposed to one of the co-lenders to Greece – believes the EU is too optimistic about that recovery.

Moscovici still hopes to convince them otherwise. He told reporters: “The IMF is a very important partner, we want the IMF to be on board. We need to have an agreement including the IMF because it is a guarantee, a security for Greece. But well, we’re going to discuss on and on until Monday the 20th of February so as to bring everybody on board and so that everybody feels comfortable with the parameters of what could be a compromise.”

Missed targets

IMF participation would add credibility to the Greek bailout, but it is not keen saying that Greece’s debt “is highly unsustainable” and “will become explosive in the long run”.

Poul Thomsen, director of the IMF’s European department, defended its view in an interview with German newspaper Handelsblatt. He said: “Accusations that we have outdated models and that we are permanently too pessimistic, goes against the fact that the Greek [reform] programme has missed targets for years now.”

Blame game

While the EU and IMF wrangle, the Greek people are apportioning blame.

Euronews’ Athens correspondent Stamatis Giannisis said: “There is a widespread feeling in Greece that the delays in the country’s exiting from the crisis are due to the disagreements between its creditors, however several crucial economic reforms have not yet gone through. In any case, further delays to the completion of the review on progress of the reforms can only bring more problems to the already extremely troubled Greek economy.”

Athens hopes for a “political” deal by February 20, when the Eurogroup, the eurozone’s finance ministers, will discuss the Greek issue in Brussels.

But Eurogroup chief Jeroen Dijsselbloem warned on Tuesday warned that the standoff was likely to drag on. “The IMF has to come on board,” he told Dutch broadcaster RTLZ.

“It will take more time. People think that as there is a Eurogroup meeting next week we must have something worked out. But that has not been my planning.”

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