Greek bailout re­view to be in­ter­rupted for Catholic Easter

The Pak Banker - - 6BUSINESS -

EU and IMF in­spec­tors as­sess­ing Greece's bailout progress will leave Athens on Sun­day and re­turn af­ter Catholic Easter, sources close to the talks said, dash­ing Greek hopes that the re­view could be con­cluded as early as the end of March. Prime Min­is­ter Alexis Tsipras wants to wrap up the bailout re­view swiftly and start talks on debt re­lief to re­store con­fi­dence in the coun­try's econ­omy and con­vince Greeks that their sac­ri­fices are pay­ing off af­ter six years of aus­ter­ity.

But the dis­cus­sions, which if con­cluded suc­cess­fully will also un­lock more bailout funds, have dragged on for months due to dis­agree­ments over fis­cal tar­gets, pen­sion cuts and tax re­forms be­tween Athens and its Euro­pean Union and In­ter­na­tional Mon­e­tary Fund lenders and among the EU and IMF in­sti­tu­tions. The talks, which re­sumed ear­lier this month af­ter a break in Fe­bru­ary, were fo­cused on find­ing ways to cover an es­ti­mated fis­cal gap of 3 per­cent of GDP by 2018, al­though the IMF ini­tially put the fig­ure at 4.5 per­cent and Athens at 1 per­cent.

"The mis­sion chiefs will leave Athens to­mor­row evening af­ter a wrap-up of this phase and will re­turn af­ter Catholic Easter," a govern­ment of­fi­cial said on Satur­day, adding that tech­ni­cal teams would con­tinue talks in the mean­time.

Ac­cord­ing to sources close to the talks EU lenders have been more le­nient dur­ing the re­view than the IMF, which has said that Greece will need far big­ger debt re­lief than euro zone part­ners have been pre­pared to en­vis­age. A meet­ing of euro zone fi­nance min­is­ters in April will be cru­cial for Greece, which is also deal­ing with a huge mi­grant cri­sis.

The govern­ment, which has a par­lia­men­tary ma­jor­ity of just three seats, has pledged to trim its pen­sion bud­get by 1 per­cent of GDP this year but wants to avoid cut­ting pen­sions for a 12th time since 2010 to plug the es­ti­mated fis­cal hole.

Govern­ment of­fi­cials said that dur­ing the lat­est round of talks the IMF op­posed key pen­sion pro­pos­als, such as hik­ing so­cial se­cu­rity con­tri­bu­tions, and wants to lower a tax ex­empt thresh­old for low­in­come earn­ers. It has also turned down a plan giv­ing tax evaders in­cen­tives to dis­close hid­den in­come, as part of ef­forts to boost tax rev­enues. "Such po­si­tions... seem to aim at dis­tanc­ing the pos­si­bil­ity of con­clud­ing the re­view," one of the of­fi­cials said.

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