Greece set to compromise

Agreement on bailout reforms could bring end to deadlock

GREECE agreed yesterday to compromise on new bailout reforms in a bid to break a deadlock with its EU-IMF creditors that has sparked fears of a new Grexit crisis.

Officials representing the lenders would return to Athens shortly for talks on new measures, Eurogroup chief Jeroen Dijssebloem said after talks in Brussels.

Austerity-hit Greece’s eurozone and International Monetary Fund lenders have been locked for months in a standoff over debt relief and budget targets.

“I’m very happy with that outcome today,” Dijsselbloem, the Dutchman who heads the Eurogroup of 19 eurozone finance ministers, told a press conference.

“They will work with the Greek authorities on an additional package of structural reforms of the tax system, pension system and labour market regulation.”

Creditor officials left Athens in December after failing to sign off on the second review of Greece’s bailout and freeing up new funds.

Dijsselbloem said they would now return soon.

Markets have been spooked by fears of a return of the “Grexit” crisis, with Athens at risk of default in July if it cannot unlock the latest tranche of the ß86-billion (R1.19trillion) bailout agreed in 2015.

Fears are that a long series of elections, starting with the Netherlands next month and France in April, could delay matters dangerously.

Greek Finance Minister Euclid Tsakalotos approved measures that would be automatically triggered if Athens failed to meet budget targets, European sources said.

“The Greek side agrees to legislate the reforms which will take effect from 2019,” a Greek government source said.

But the deal would include an inviolable clause that there would not be one single euro more of austerity, the source said.

The measures must still be approved by the Greek parliament, a step that has caused problems in previous deals.

German Chancellor Angela Merkel meets IMF chief Christine Lagarde and European Commission head Jean-Claude Juncker in Berlin tomorrow in hopes of making further progress.

The Europeans have been at loggerheads with the IMF over the Washington-based lender’s demands for easier budget targets and for Athens’ mountain of debt to be reduced.