Re­view needs debt agree­ment

Eu­ro­zone of­fi­cial says it is dif­fi­cult but not im­pos­si­ble for ne­go­ti­a­tions to be con­cluded within 2016

Kathimerini English - - Focus - BY ELENI VARVITSIOTIS

BRUS­SELS – The sec­ond bailout re­view is un­likely to con­clude with­out an agree­ment on a Greek debt set­tle­ment that would satisfy the In­ter­na­tional Mon­e­tary Fund, a se­nior eu­ro­zone of­fi­cial said yes­ter­day. How­ever, he added that, de­spite the ex­pected dif­fi­cul­ties, he was op­ti­mistic that a deal could be reached within 2016.

“I am con­vinced it is pos­si­ble to have it com­pleted within 2016. It will take sig­nif­i­cant ef­forts and it will not be easy, as there is a se­ries of is­sues re­quir­ing po­lit­i­cal de­ci­sions,” the of­fi­cial said, cit­ing la­bor re­forms and fis­cal tar­gets for 2017 and 2018, among oth­ers.

The De­cem­ber 5 Eurogroup meet­ing will be the last for this year, and for the bailout re­view to re­ceive the eu­ro­zone fi­nance min­is­ters’ nod there will have to be an agree­ment with the cred­i­tors by the end of Novem­ber.

How­ever, de­spite the op­ti­mism ex­pressed in Brus­sels, there is only limited time for ev­ery­thing that has to hap­pen by the end of the month: Be­sides the re­view, there has to be an agree­ment on the debt al­low­ing the IMF to agree to take part in the pro­gram in prin­ci­ple. The IMF of­fi­cials will then have to go to their Board of Gover­nors with a pro­posal fa­vor­ing the Fund’s par­tic­i­pa­tion in the pro­gram.

“All this has to take place si­multa- neously,” the eu­ro­zone of­fi­cial ar­gued: “It is an am­bi­tious project but not an im­pos­si­ble one,” he added, mak­ing clear that in case this is not done within 2016, “it will not be the end of the world.”

If there is no de­ci­sion on De­cem­ber 5, then the whole af­fair will move to next year, given that the same of­fi­cial con­sid­ers it tech­ni­cally dif­fi­cult to have an ex­tra­or­di­nary Eurogroup meet­ing within De­cem­ber.

The In­ter­na­tional Mon­e­tary Fund’s 573.92 1.1093 debt sus­tain­abil­ity anal­y­sis is not ex­pected be­fore the con­clu­sion of the sec­ond bailout re­view, as it will need to in­clude a se­ries of pa­ram­e­ters that will only be­come known at the end of the ne­go­ti­a­tions, such as what fis­cal tar­gets will be set.

The of­fi­cial also at­trib­uted all talk about open­ing the so­cial se­cu­rity is­sue dur­ing the sec­ond re­view to a trans­la­tion er­ror, as the is­sue to be dis­cussed only con­cerns the re­form of wel­fare ben­e­fits.

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