Business World

Wednesday 20 November 2019

Debt inspectors to return to Greece after progress during talks

Greek Crisis

Gabriele Steinhauser, In Athens


Aid tranche Greece needs next month to halt default

International debt inspectors will return to Greece next week to resume a review of the cash-strapped government's austerity programme after making progress late last night in a teleconference with the Greek finance minister.

The decision implies that Greece managed to convince the troika -- from the European Commission, IMF and ECB -- that it will be able to meet its budget targets, a precondition for continued payment of the rescue loans that are shielding the country from bankruptcy.

"Good progress was made, and technical discussions will continue in Athens over the coming days," a European Commission statement said after the two-hour talks. "The full mission is now expected to come back to Athens early next week to resume the review, including policy discussions."

A spokesman for the commission declined to say whether Greek Finance Minister Evangelos Venizelos offered new measures beyond what has already been announced.

"Satisfactory progress was made," the ministry said in a statement. "The talks will continue this coming weekend in Washington DC, where Evangelos Venizelos is going to attend the annual meeting of the International Monetary Fund."

Earlier, global stocks had edged higher on hopes a deal could be struck in the call -- the second in two days -- allowing release of the next batch of bailout funds

Although there is a growing expectation that Greece will do enough to get the €8bn it needs to avoid a default next month, most analysts think the country will have to restructure its debts sometime down the line.

Fitch Ratings said in a report yesterday that it expected Greece to eventually default, but to do so while remaining in the eurozone.

Some experts believe the country will have to drop out of the 17-nation euro, a notion dismissed by Mr Venizelos.

"Greece's participation in the eurozone and the euro is an irrevocable and fundamental national choice that the Greek population is making sacrifices to safeguard, in full knowledge of how priceless it is," Mr Venizelos said yesterday, rejecting a Greek newspaper report that the government was considering a referendum on the issue.

The EU and IMF are increasing pressure on Athens to deliver on pledges to slash its deficit even as the economy heads for a fourth year of recession.

The IMF has told Athens to cut the public workforce and payroll, shut inefficient state entities, fight tax evasion and sell billions of euros of state property to plug its budget gap.

The government has introduced painful new taxes on wages and property and cut public sector pay and pensions, but had baulked until yesterday at sacking more civil servants, a key component of the governing socialist party's electorate.

Deputy government spokes-man Angelos Tolkas said: "Our primary target is to shrink the state. The Greek state budget has stopped paying the wages of some 200,000 civil servants in the last two years. And we are continuing."

Irish Independent

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