Eurozone finance ministers warned on Thursday that a “window of opportunity” was closing on bridging a split over Greece’s bailout program, even as they failed to heal a row with the IMF over debt relief.
The IMF and the 19-nation single currency area are battling over how much debt relief Greece needs, and over economic targets required of Athens that the IMF says are not realistic.
“The window of opportunity is still open, but will soon shut because there are elections coming,” French Finance Minister Michel Sapin said after unsuccessful talks on Greece with his eurozone counterparts.
In addition, by the summer “Greece faces important debt repayments, so we have to find a solution before then,” Sapin said, with bailout cash blocked until a solution is found.
Months of bickering have delayed progress of Greece’s 86 billion euro (US$92.4 billion) bailout program agreed in 2015 and officials are increasingly worried that elections this year in the Netherlands, France and Germany could further poison any progress.
Eurogroup President Jeroen Dijsselbloem insisted that the IMF remained committed to the Greek bailout program, but that its demands were indeed strict.
“The IMF has been very clear and consistent on its position. They want the reform package to be credible, they want the fiscal trajectory to be feasible and economically viable and they want the debt to be sustainable,” said Dijsselbloem, who is also the Dutch finance minister.
Germany, Greece’s biggest creditor, says that Athens is up to the task of meeting the targets without further debt relief and has called on the Greek government to deliver on reforms.
“It’s up to the Greeks to solve the problem,” said German Finance Minister Wolfgang Schaeuble, the Eurogroup’s most influential member.
At heart of the problem is a demand by the eurozone that Greece deliver a primary balance, or surplus on public spending before debt repayments, of 3.5 percent of GDP.
The target is very high — and most countries do not even come close — but Germany and other eurozone hardliners are insistent that Greece reach it for several years after its current program concludes next year.
The IMF believes that hitting the long-term target will require debt relief and has also demanded extra commitments by Athens in case it falls short.
Greek Finance Mister Euclid Tsakalotos slammed these new demands as undemocratic.
“It is not correct to ask a country in a program to legislate, two or three years beforehand, what it will do in 2018,” Tsakalotos said.
Already huge, Greece’s debt hit 311 billion euros last year, or around 180 percent of output, according to the latest EU data.
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