Hope for more EU credit after bailout exit
Prime Minister Antonis Samaras hopes that his fragile coalition government might secure an additional credit cushion from its euro zone partners if it manages to meet the strict terms required to exit the bailout programme at the end of this year, a source close to discussions was quoted by Reuters as saying.
Discussions with Greece, which has had a total of 240 bln euros in loans, focused on a new line of credit with the European Stability Mechanism, the source said.
The Handelsblatt newspaper quoted German government sources as saying a precautionary credit could help ensure Athens stuck to a programme of economic reforms prescribed by the EU in return for a bailout of public debt.
The Greek government is in negotiation with the troika of international lenders ahead of the expiry of its bailout package on December 31, saying it wants its bailout to finish when EU funding stops, though the IMF is scheduled to stay on until early 2016.
An exit from supervision by the troika of the European Commission, European Central Bank and IMF would be popular with voters, with political analysts suggesting a snap election is likely next March.
Euro zone ministers meeting in Luxembourg on Monday warned that, despite improvements, the Greek economy remains fragile.
Separately, Eurogroup chairman Jeroen Dijsselbloem said any credit extended to Greece after a bailout exit would also be conditional on economic reforms.
The Greek government has been keen to avoid further detailed conditions for reform, which have been deeply unpopular.
Dijsselbloem told reporters it was premature to speak of a precautionary line of credit before a review of Athens’ reform efforts by the troika was complete.
Greece began talks to end the IMF aid to the country over the weekend, but will continue to have routine post-bailout reviews by the Washington-based group, a Greek official said after talks with the IMF’s chief on Sunday.
“Everything is on the table, the discussions have started. The IMF is positive because it believes that it has contributed to progress in Greece,” a finance ministry official said after a meeting with IMF chief Christine Lagarde.
“The IMF continues with a postprogramme review in every country it lends to...we will have a relationship with the IMF but not under the same conditions.”
The IMF in a statement confirmed that Lagarde met Greek officials including the finance minister and the Bank of Greece governor and praised Greece for improving its fiscal position and urged it to implement key structural reforms.