Greece has three days to deliver or face consequences: EU officials

Greece has three days to reassure Europe and the IMF that it can deliver on conditions attached to its bailout in order to receive its next tranche of aid, four euro zone officials said on Tuesday

hidden July 03, 2013 08:25:09 IST
Greece has three days to deliver or face consequences: EU officials

Athens: Greece has three days to reassure Europe and the IMF that it can deliver on conditions attached to its bailout in order to receive its next tranche of aid, four euro zone officials said on Tuesday.

The lenders are unhappy with progress Greece has made towards reforming its public sector, a senior euro zone official involved in the negotiations said, while another said they might suspend an inspection visit they resumed on Monday.

Athens, which has about 2.2 billion euros of bonds to redeem in August, needs the talks to conclude successfully.

Greece has three days to deliver or face consequences EU officials

In Athens, a file photo of a protest against fresh austerity measures as part of the bailout deal. Reuters

If they fail, the International Monetary Fund might have to withdraw from the 240 billion euro bailout to avoid violating its own rules, which require a borrower to be financed a year ahead.

That would heighten the risk that concerted efforts by policymakers over the past nine months to keep a lid on the euro zone crisis could unravel, at a time when tensions are rising in other troubled debtor countries.

Athens is scrambling to bridge differences with troika inspectors and wrap up the review by the end of this week, a Greek coalition official who took part in the talks told Reuters on Tuesday.

"Negotiations must be concluded by Saturday or Sunday at the latest in order to have a (troika) staff agreement that will be discussed at a Eurogroup meeting on Monday," said the official who declined to be named.

The two sides had yet to agree on how to plug a fiscal gap and Athens has missed a June deadline to place 12,500 state workers into a "mobility scheme", under which they are transferred or dismissed within a year.

Tensions over bailout terms have also mounted in Portugal, where Finance Minister Vitor Gaspar, the architect of its bailout measures, resigned on Monday and was followed on Tuesday by Foreign Minister Paulo Portas.

In Italy, Prime Minister Enrico Letta called a government meeting after a coalition partner threatened to withdraw, demanding faster moves to make the economy more competitive.

Athens and its creditors resumed talks on Monday to unlock 8.1 billion euros of rescue loans, after a two-week break during which the government almost collapsed over redundancies at state broadcaster ERT.

"All agreed that Greece has to deliver (pledges) before the Eurogroup on Monday. That's why they must present again on Friday," a second source told Reuters.

Euro zone finance ministers are scheduled to meet on July 8 and discuss Greece, which is in its sixth year of recession with unemployment at record highs.

"It is a very difficult negotiation," a senior Greek official participating in the talks said. "We're moving fast to wrap up as many issues as possible as soon as possible."

But Greece's financial overseers - the IMF, the euro zone and the European Central Bank - were unlikely to be able to conclude their review in July and might need to suspend the visit and resume it in September, a senior euro zone official said on condition of anonymity.

Representatives of the EU-IMF-ECB "troika" have been holding serial meetings with government ministers in Athens on a host of outstanding issues. If talks are not concluded by the middle of the month, Athens risks missing the instalment, the Greek official added.

Athens and the troika are at odds over an unpopular property tax and a sales tax for restaurants, while a shortfall of more than 1 billion euros has emerged at state-run health insurer EOPYY, meaning automatic spending cuts may have to be agreed to bring it back on an even keel.

The government plans to ask its creditors to lower this year's privatisation target of 2.6 billion euros after failing to find a buyer for natural gas company DEPA.

The beleaguered government of Prime Minister Antonis Samaras has ruled out imposing any new austerity measures. Unemployment has hit a record 27 percent and Greeks have lost about a third of their disposable income as a result of bailout policies.

Reuters

Updated Date:

also read

Negotiations on India-EU trade deal to resume next month, says finance minister Nirmala Sitharaman
World

Negotiations on India-EU trade deal to resume next month, says finance minister Nirmala Sitharaman

Negotiations on a free trade agreement have been stalled since May 2013, when both sides failed to bridge substantial gaps on crucial issues including data security status for the IT sector

India's debt ratio to GDP increases from 74% to 90% during COVID-19: IMF
India

India's debt ratio to GDP increases from 74% to 90% during COVID-19: IMF

Vitor Gaspar, Director of IMF's Fiscal Affairs Department, said that widening deficits and contraction in economic activity, debt worldwide increased sharply to 97% of GDP in 2020

A haunting silence pervades cafes, restaurants in Greece as the country's second lockdown continues for six months
long reads

A haunting silence pervades cafes, restaurants in Greece as the country's second lockdown continues for six months

Restaurants, bars and cafes, whose nature it is to gather groups of people closely together, have remained shut since November when the Greek government imposed a second lockdown to curb the spread of COVID-19 infections