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Greece says ‘close’ to deal with creditors

Euro & Finance

Greece says ‘close’ to deal with creditors

Euclid Tsakalotos [Reuters]


Greece said late on Tuesday that (12 April) it was “very close” to clinching a deal with its international creditors despite, a suspension of a tough round of talks on the country’s latest reforms.

“We are very close to an agreement with the institutions. The definitive decisions will be taken between now and 22 April, or at the latest 26 April” at a possible extraordinary meeting of eurozone finance ministers, said Finance Minister Euclid Tsakalotos.

He added that “two draft bills will be introduced in parliament by next week”, the first on controversial pensions reforms and the second on income tax reforms.

Athens’ aim is to pass the two laws “by the end of April”, he told reporters at a joint press conference with the Greek employment and economy ministers.

On Monday (11 April) Tsakalotos had announced the suspension of talks with the creditors — the European Commission, the International Monetary Fund, the European Central Bank and the European Stability Mechanism (ESM) — taking a break for a scheduled IMF meeting.

“It was decided to have a pause so we can all go to Washington” for the annual spring meeting of the IMF, he said, adding: “There was major progress on several issues.”

Government spokesman Olga Gerovassili said there had been progress in the negotiations but “without any backing down by the government on its red lines”, notably on pensions.

The talks have mostly hinged on an unpopular pensions overhaul and the management of bad loans weighing down Greek banks, with Athens resisting pressure to sell them to funds specialising in distressed debt.

In a last-minute breakthrough, the Greek energy ministry on Tuesday said it had agreed to launch in June the sale of at least 20% of state electricity distributor Admie.

The electricity sector in Greece is characterised by a near-monopoly of the state-owned Public Power Corporation S.A. (PPC).

Greek industry puts hope in EU to ease the grip of national monopolies

Greece’s state electricity supplier should negotiate its tariffs and not impose them unilaterally, according to a European Commission decision that paves the way for a “new deal” on energy pricing in heavy industry.

The latest round of creditor talks were clouded by allegations that senior IMF officials sought to engineer a Greek default.

Just before the talks opened last week, a WikiLeaks report said the IMF was looking for a crisis “event” to push Greece and European negotiators into accepting its fiscal targets, citing an intercepted conversation between senior IMF officials.

IMF chief Christine Lagarde later dismissed the report as “nonsense”.

Leaked IMF report says Greece needs much more help

Greece will need far bigger debt relief than eurozone partners have been prepared to envisage so far due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters shows.

Tsipras’s leftist government has frequently crossed swords with the global lender. Last year, he said the Washington-based organisation carried “criminal responsibility” for Greece’s austerity-driven recession woes.

More recently, Tsipras has accused the IMF of employing “stalling tactics” and “arbitrary” estimates to delay the reforms review that is crucial to Greece receiving further bailout cash.

Greece needs the money to meet a July repayment of some €3.5 billion in bonds held by the European Central Bank.

The IMF has worked with the EU on two previous bailouts for Greece since 2010, but said it would not participate in the latest rescue plan without credible reforms and an EU agreement to ease Greece’s debt burden.