EU’s Moscovici urges quick Greece debt compromise
Top EU economics official Pierre Moscovici urged Greece and its creditors yesterday to try and reach a compromise over the cash-strapped country’s bailout terms in the next few “key days”.
The former French finance minister spoke during a visit to Athens aimed at breaking the deadlock between Greece and its eurozone and International Monetary Fund (IMF) lenders, which has raised fears of a fresh debt crisis.
His trip came five days before a meeting of eurozone ministers that is seen as an unofficial deadline to end the stalemate ahead of important elections in Europe. “We have a few key days, let’s concentrate now to finish all these talks. The parameters are on the table, everybody knows them,” Moscovici told reporters after meeting Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos.
The EU commissioner said he was confident of progress towards a deal “if efforts are made by all sides”. The IMF and Europe are split over a demand by the eurozone that Greece deliver a primary balance, or budget surplus before debt repayments, of 3.5 percent of GDP. The IMF has said only 1.5 percent is feasible. The Tsipras government refuses more pension cuts and tax hikes, which the IMF-quietly backed by Germanyinsists are necessary for Greece to deliver on its targets.
‘Tunnel of austerity’
The feuding has blocked a tranche of loans from Greece’s 86 billion euro ($91 billion) bailout that it needs for debt repayments of 7.0 billion euros this summer. Considered an ally of Greece, Moscovici said that although more reforms would be necessary, it was important to tell Greek people “that there is a light at the end of the tunnel of austerity”.
“We must strike the right balance between fiscal sustainability on the one hand, but also prosperity and the necessity to address... the concerns of those who suffer from poverty or unemployment,” he said.
Talks in Brussels between Greece and its creditors on Friday ended with no breakthrough. On Tuesday the Greek government hailed figures showing the country had returned to annual growth in 2016, using it for a fresh assault on further austerity measures.
Early estimates from the national statistics office and projections from Brussels showed growth of 0.3 percent last year. Moscovici welcomed the growth and called for a “reformed Greece in the heart of the eurozone,” defying concerns over the country’s future in the monetary union.
More time needed
Despite the commissioner’s push for an agreement next week, Eurogroup chief Jeroen Dijsselbloem warned on Tuesday warned that the standoff was likely to drag on.
“The IMF has to come on board,” he told Dutch broadcaster RTL Z. “It will take more time. People think that as there is a Eurogroup meeting next week we must have something worked out. But that has not been my planning.” An IMF report obtained by AFP last week said Greece’s debt “is highly unsustainable” and “will become explosive in the long run”. But European Commission vice-president Valdis Dombrovskis said the outlook from the Washington-based fund was “very pessimistic”. “That’s why there is now a gap between our figures and those of the IMF” he told German newspaper Handelsblatt yesterday, expressing hope that the gap could be filled. —AFP