Tags: EU | Greece | Bailout

Greece Tries to Convince European Creditors It's Met Targets

Greece Tries to Convince European Creditors It's Met Targets

Monday, 05 December 2016 01:16 PM EST

BRUSSELS (AP) — Greece's finance minister is trying Monday to convince his counterparts in the 19-nation eurozone that his country has delivered on the reform promises made in return for the bailout money that saw off bankruptcy and a potential exit from the euro.

At a meeting in Brussels largely overshadowed by the resignation of the Italian referendum result that forced Premier Matteo Renzi to resign, Greece's Euclid Tsakalotos is looking to get his peers to wrap up the second review of Greece's third bailout.

A successful review would trigger talks with the European creditors about debt relief for Greece. It would also get Greek bonds one step nearer to being eligible to be bought by the European Central Bank via its bond-buying program from which it has been excluded. That's important as it could help reduce the interest rates that Greece has to pay when it hopes to start tapping bond markets again from 2018.

Though officials said progress had been made, they gave few signs that an agreement can be expected Monday. Pierre Moscovici, the EU's top economy official, said that the two sides were "close" but that a few issues remained to be addressed.

Though Greece has delivered on much of its requirements for reforms, it has struggled to convince some of its creditors — notably Germany — that its efforts have gone far enough.

Under the terms of the bailout, which could see up to 86 billion euros ($91 billion) in loans over three years, the Greek government promised a series of economic reforms and budget cuts.

Greece has for the past six years relied on bailout loans — totaling a colossal 300 billion euros — from eurozone partners and the International Monetary Fund to avoid bankruptcy.

The IMF, which has yet to commit to Greece's third bailout program, has argued strongly in favor of a big debt relief package for Greece and has suggested that the forecasts used in the Greek bailout plan are too rosy.

Though successive governments have slashed spending over that time and raised taxes, Greece is still lumbered by high debt of more than 175 percent of annual GDP. That's far more than any other eurozone country and a level that the IMF and the Greek government consider unsustainable. It would take Greece decades of economic growth to get debt down to more manageable levels around 100 percent of GDP.

Though an outright reduction in Greece's debt — a so-called haircut — has been ruled out, the Greek government insists that its eurozone creditors deliver on their promise in 2015's bailout agreement that Greece will get some debt relief. These could take the form of a longer repayment timetable for Greece's loans or further reductions in the interest rates payable on those loans.

"A nominal debt cut is still ruled out by everyone — no one will accept that," said Austrian Finance Minister Hans Joerg Schelling. "We were always prepared to discuss this debt management, the question of maturity and interest."

Germany in particular, has been hesitant to deliver anything until Greece has delivered the reforms.

"What I think is realistic on Greece is that they will manage to be competitive at some point if they carry through the necessary reforms," said Wolfgang Schaeuble, Germany's finance minister. "It's about that and absolutely nothing else."

Worries over Greece may have eased in recent months but the country still has the potential to be the biggest problem for the long-run survival of the euro.

The left-wing government of Alexis Tsipras is losing support, according to opinion polls, and only has a small parliamentary majority, a combination that could make it more difficult to deliver the reforms required by creditors.

Geir Moulson in Berlin contributed to this report.

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Europe
Greece's finance minister is trying Monday to convince his counterparts in the 19-nation eurozone that his country has delivered on the reform promises made in return for the bailout money that saw off bankruptcy and a potential exit from the euro.At a meeting in Brussels...
EU,Greece,Bailout
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2016-16-05
Monday, 05 December 2016 01:16 PM
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