| LUXEMBOURG, June 15
LUXEMBOURG, June 15 Greece's international
lenders are expected to agree on Thursday to unblock as much as
8 billion euros in loans that Athens desperately needs to next
month to pay its bills, but to leave the contentious issue of
debt relief for later.
Euro zone finance ministers will meet in Luxembourg together
with International Monetary Fund chief Christine Lagarde. She
suggested last week that the IMF could join the Greek bailout
now, but not disburse any money until the euro zone clarifies
what debt relief it can offer Greece.
The IMF has so far refused to join in this bailout, Greece's
third since 2010, because it believes that without relief Greece
cannot get out from under its massive debt mountain.
Euro zone powerhouse Germany does not want to discuss
details of debt relief before German parliamentary elections in
September. At the same time, its parliament insists on IMF
participation if it is to agree new disbursements.
Greek Economics Minister Dimitri Papadimitriou accused
German Finance Minister Wolfgang Schaeuble of being "dishonest"
by blocking debt relief for Greece despite his acknowledgement
that Athens has implemented significant reforms.
IMF participation, even without immediate disbursements,
should be enough for the German parliament to back new euro zone
loans to Athens, thus ensuring Greece would get enough cash in
July to repay maturing debt and avoid default.
Euro zone officials have said that the compromise, if agreed
on Thursday, could result in Greece receiving between 7.4 and 8
billion euros ($8.3-9.0 billion) from the euro zone bailout fund
ESM to cover July repayments.
The IMF and the euro zone have widely different forecasts
for Greek growth in the decades to come and on Athens' ability
to achieve high primary surpluses - the budget leftover not
including debt servicing costs - to solve its financial crisis.
Some euro zone scenarios show that with sufficiently high
economic growth and budgetary discipline - a primary surplus
above 3 percent of GDP for 20 years - Greece would not even need
any debt relief.
But the IMF, with much more conservative estimates and
stressing previous Greek underperformance on targets, says it is
unrealistic to demand high primary surpluses for so long.
Pressure is also mounting at home on Greek Prime Minister
Alexis Tsipras from a public weary of austerity.
Greece says it has done its part after legislating further
pension cuts and tax hikes demanded by lenders to convince the
IMF to participate.
"Greece has fulfilled its commitments and adopted the
required reforms. Now it is time for the Europeans to comply
with their commitments on debt relief," Greek President Prokopis
Pavlopoulos said in an interview with German business daily
In Athens, some 1,500 pensioners gathered to protest more
than a dozen rounds of pension cuts since bailout-induced
austerity was enforced seven years ago.
"We have been robbed blind," said Stavros Vassiliou, 65, "I
worked 41 years in construction … I was taking 2,400 euros in
2011, now I take (a pension) of 1,000. I have a mortgage and
four kids to support."
Governments of some of the euro zone creditors have said the
reduced pensions do not appear to be at hardship levels.
Athens says it wants a debt relief agreement "that gives
clarity to the markets, but of even greater importance, renewed
hope to the people of Greece", a government official told
Reuters before the meeting.
($1 = 0.8938 euros)
(Additional reporting by Rene Maltezou and Francesco Guarascio
in Luxembourg, Michele Kambas in Athens; writing by Philip
Blenkinsop Editing by Jeremy Gaunt)