Friday 22 November 2019

Greek talks begin to try to kick-start reform plan

Greek Finance Minister Yanis Varoufakis arrives for a ministerial meeting at the parliament in Athens. Getty Images
Greek Finance Minister Yanis Varoufakis arrives for a ministerial meeting at the parliament in Athens. Getty Images

Jan Strupczewski

Greek representatives started talks with official international creditors in Brussels yesterday, taking the first step toward an agreement on the reforms the country must implement to unblock further aid as Athens runs out of money.

It is the first such meeting between Greece and its official creditors since the new, left-led government in Greece took power at the end of January on a pledge to end the fiscal discipline that was the condition for almost €240bn in loans that Athens has received since 2010.

European officials cautioned, however, that the meeting yesterday would not produce any spectacular results and reform implementation would not even be discussed at this stage.

"They will discuss working methods," one European official said. "They have to agree on how to get on with it and that's why this will not be a particularly long meeting - they should wrap it up by tonight or tomorrow."

Discussions on a concrete set of reforms that Athens would need to undertake to get the €7.2bn from various creditors outstanding under the bailout would only start in the next meetings, officials said.

"These talks need to take forward the specification of the list of reform proposals envisaged by the Greek authorities in order to be able to reach an agreement at the latest by the end of April," Commission spokeswoman Mina Andreeva said.

Time is short because Greece could run out of cash by the end of the March, which could mean a default on payments that are due in the following months, unless it gets more loans from the Eurozone.

While talks on what reforms will have to be done will take place in Brussels, technical teams of the Greek government and the creditors will work in parallel in Athens, because that's where all the necessary data was, officials said.

"The Greeks won't be expected to implement 100pc of the measures envisaged by the bailout, no country under a bailout had done so, but they will have to do a critical majority - let's say the 70pc that was mentioned," the European official said.

Greek Finance Minister Yanis Varoufakis told Greek politicians in February that the government would implement about 70pc of reforms included in the current bailout agreement.

The list is likely to include the seven measures proposed by the new Greek government, which include the activation of an already legislated, but never created Fiscal Council to monitor government fiscal policy.

There would also be spending ceilings for various levels of government and corrective mechanisms that would kick-in on a quarterly basis if ceilings were breached.

To end Greece's culture of tax avoidance, the government wants to hire large numbers of non-professionals to act as temporary tax inspectors. Recruited from among, for example, students, housekeepers or tourists, they would be wired for sound and video to gather evidence.

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