The increasingly beleaguered Greek government on Monday afternoon again maintained, albeit in an unofficial manner, that it will take new austerity measures “only after the implementation of medium-term debt relief”, more-or-less echoing the most recent statements by both the prime minister and finance minister.
The statement came via a “non paper” issued on Monday evening aiming to prevent “misunderstandings”, as it noted, regarding Friday’s draft agreement with creditors, the result of a year of negotiations to finally conclude the second review of the Greek program.
The statement also came after negative same-day comments by German Finance Minister Wolfgang Schaeuble concerning the possible of Greek debt relief in the coming period. Conversely, both Greek PM Alexis Tsipras and FinMin Euclid Tsakalotos promised, two days apart, that pension cuts and the slapping of income taxes on lower-income taxpayers will come only after debt relief.
“… after implementation of the medium-term measures for the debt (September 2018) will measures and countervailing measures envisioned in the Malta agreement be implemented,” was the exact statement. The Malta reference is to the Friday agreement hashed out ahead of a Eurogroup meeting that was held in the Maltese capital of Valletta.
The Greek side maintained that a “road map” linked to Friday’s agreement includes the “fine-tuning” of medium-term debt relief measures to be decided at the next Eurogroup meeting, “…(measures) which have on numerous occasions been clarified as being implemented at the end of the (bailout) program (Aug-Sept 2018)”.
The same announcement pointed to debt relief as imperative for the IMF’s continued involvement in the Greek bailout program – the third in a row.
In pointing to the specific IMF position that it strongly favors, the Tsipras government said the Fund’s sustainability study for the Greek debt must be positive, otherwise the Fund’s board of directors will not approve any further involvement in the Greek bailout.
Schaeuble was quoted as repeating that the current Greek bailout can move forward only with IMF participation. His statement came before a scheduled meeting in Berlin between German Chancellor Angela Merkel and IMF chief Christine Lagarde.
He also warned that without the IMF in the Greek bailout, Euro zone member-states would have to get a new mandate to "allow us to negotiate a program without the IMF (involved)" - something he said was out of the question.
