New bailout talks to begin in Greece

ATHENS, Greece — Representatives of Greece’s bailout creditors are due in Athens to restart talks on further cutbacks, European officials said Monday, as they confirmed that the country last year vastly exceeded its budget targets.

Commission spokesman Margaritis Schinas said the negotiations are expected to start Tuesday and should last several days, with the objective of reaching an agreement “as soon as possible.”

That would clear the way for further talks on easing Greece’s debt burden, currently at 179 per cent of GDP.

Following long delays in the negotiations, Greece has already agreed to further slash pensions in 2019 and drastically expand the tax base in 2020 by reducing the current tax-free threshold.

The forthcoming talks are expected to focus on the final details of these measures, which will be worth about $3.85 billion.

Schinas also noted that Eurostat, the European Union’s statistical authority, has confirmed Greece’s 2016 budget figures, which far exceeded forecasts.

The primary budget surplus — which excludes debt servicing costs — reached 3.9 per cent of annual output, according to the system of calculations used by Greece’s statistical authority. According to the terms of the country’s bailout, the surplus was 4.2 per cent. Either way, it far overshot the initial target of 0.5 per cent of GDP.

Schinas said the surplus, which is subject to final verification, “confirms the trends which we at the Commission have been reporting for a while,” and expressed confidence the country can meet its budget targets in 2017 and 2018.

Greeks have suffered seven years of repeated income cuts and tax hikes after the public finances imploded in 2010, forcing the country to rely on international bailouts.

To secure the rescue loans, successive governments imposed harsh cutbacks, amid a rapidly shrinking economy that has lost a quarter of its pre-crisis value, and record-high unemployment. The current, third bailout signed by the left-led government in 2015 runs until mid-2018 — after which the country is expected to be in a position to start borrowing again from international bond markets.

THANASSIS STAVRAKIS/THE ASSOCIATED PRESS A woman and her dog pass graffiti on a wall in Athens, Greece. Greece’s statistics agency says the country has posted a primary budget surplus in 2016, at 3.9 percent of gross domestic product.