European Union chops Greece growth forecast amid bailout row

Paterniano Del Favero
Mag 19, 2017

German Finance Ministers Wolfgang Schaeuble, also at the meeting of the Group of Seven advanced economies in Bari, asked if he would be prepared to ease the conditions for debt relief, said: "We are prepared to stick to what we have agreed in May 2016". Several eurozone governments want the International Monetary Fund to take part in a third bailout for credibility reasons even though they disagree with the need for debt relief.

"There is not enough clarity yet but I hope that the European partners will continue to progress in that".

The IMF and eurozone finance ministers have been debating for how many years Greece is to keep its primary surplus at 3.5% of gross domestic product, with views ranging from 2-3 years to 10 years-the upper figure being regarded as completely unrealistic by Lagarde.

"We have two issues, policies which are being voted on now, I hope, by the Greek authorities".

Greece, the European Union and the International Monetary Fund last week announced an agreement on the policy package, which includes tax and pension reforms. Athens needs the first tranche of the bailout to be delivered by July to ensure it can repay 7 billion euros in maturing loans.

Additional debt relief for Greece has proved a contentious point for many of its European creditors including powerful Germany, where additional concessions are unpopular with an electorate called to a general election in September.

European Finance Commissioner Pierre Moscovici said he was optimistic a deal with Greece would be wrapped up at a meeting of Eurozone finance ministers on May 22. "After so many years of recession, the Greek people really need that".

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