Daily Management Review

Talks on Greece’s Financial Bailout Review Resumes Between Athens and Lenders


02/28/2017




Talks on Greece’s Financial Bailout Review Resumes Between Athens and Lenders
With the aim of keeping the bailout funds flowing into Greece and to ensure that the crisis-hit nation is kept afloat financially, Greece and its lenders resumed talks, that had been stalled for a long time, in Athens on Tuesday related to the reforms that the debt ridden country needs to adopt to allow further financing.
 
The reason for the stale mate in the talks about Greece’s financial aids continuing ebbed form the disagreement that happened between the European Union and the International Monetary Fund related to the country’s fiscal goals next year and beyond when the current bailout program expires and its bailout performance. This has resulted in the review of the loan and funds being dragged on for months.
 
As government ministers and technocrats gathered at a central Athens hotel for negotiations, they were tight lipped. They had scheduled a protest there on Wednesday evening, said members of a left-wing trade union, PAME.
 
"Today we will be examining the fiscal gap and any steps which should be taken after 2018," a government official said.
 
In a manner that is similar to how investors' nerves are jarred by unpredictable election races in the Netherlands, France and Europe's paymaster, Germany, so too is the uncertainty surrounding Greece's bailout talks which has been revived with fears of a new financial crisis erupting in the euro zone.
 
Greece will face an elevated risk of defaulting on debt repayments worth about 7.5 billion euros in July if the bailout funds are not dispersed in time, despite the fact that the country does not need loans until the third quarter.
 
The 2018 target for a 3.5 percent primary surplus - which excludes debt servicing costs, and which has been set for Greece is likely to be met by it and the country is on track for the same, says Europe.
 
However, unless Athens is granted further debt relief and adopts extra belt-tightening measures, the economy would not be able to meet its targets, says the IMF which is still undecided on whether it will participate in Greece's third rescue package.
 
Some unpopular reforms that include bringing in changes in income tax and pension spending, which is supposed to come to effect in 2019, has been agreed to be pre-legislated by the leftist-led government last week in order to help break the impasse.
 
In the hope that the country will be included in the European Central Bank's bond-buying program and return to bond markets this year, Prime Minister Alexis Tsipras' government, whose popularity is sagging, wants to conclude the review swiftly.
 
(Source:www.reuters.com) 






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