The IMF’s insistence on covering supplementary funds’ deficits exclusively from cuts in benefits and the thorny issue of non-performing loans in the country – now upwards of 80 billion euros – is reportedly behind the Greek government’s abrupt “diplomatic offensive” to achieve a first review of the Greek program and avoid any potential summertime credit asphyxiation.
By Dimitris Hatzinikolas
The IMF’s insistence on covering supplementary funds’ deficits exclusively from cuts in benefits and the thorny issue of non-performing loans in the country – now upwards of 80 billion euros – is reportedly behind the Greek government’s abrupt “diplomatic offensive” to achieve a first review of the Greek program and avoid any potential summertime credit asphyxiation.
Greek Prime Minister Alexis Tsipras will travel to Paris and Strasbourg this week for previously unscheduled meetings with French President Francois Hollande and European Parliament president Martin Schulz, respectively, two European leaders that have expressed more conciliatory positions vis-a-vis the leftist Greek government’s bruising negotiations with institutional lenders’ over the past year and a half.
The majority SYRIZA government abandoned hope that negotiations would close this week, ahead of the IMF spring meeting in Washington. Another point of irritation, according to the government side, stems from the fact that German Chancellor Angela Merkel was positive over the idea of raising social security contributions as a way to shore up Greek pension funds’ finances – a position adamantly opposed by the IMF’s representatives.
The meeting with Hollande was finally set for Wednesday at 7 p.m. (Local time) at French president’s office, with a working lunch on the menu for Thursday’s meeting in Strasbourg with Schulz.
As reported by “N” on Tuesday, the Athens government will try to sidestep the IMF’s demands and table two draft bills – on pension reforms and tax measures – that it believes cover the points agreed to with European creditors – Commission, ECB, ESM. The “variable” of non performing loans, nevertheless, is not included in the draft bills, given the ECB’s disagreement with Athens’ position.
The gambit by the leftist government – amid the still ongoing refugee crisis plaguing Greece more than any other EU country – risks a return to the tenuous situation experienced in the country last June and July.
In a slightly brighter tone, EU Commission Pierre Moscovici was quoted by Le Monde on Tuesday as saying the Commission believes the two sides (Greek government and creditors) are not too far apart in terms of the first review, “although the IMF is of a different opinion”. He also expressed a hope that differences will be overcome and a compromise achieved, although he said “unilateral decisions” must be avoided, i.e. the government tabling the two draft bills without creditors’ prior approval.