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Greece's lenders to send experts to Athens to approve reforms, unlock funds
April 7, 2017 / 9:43 AM / 7 months ago

Greece's lenders to send experts to Athens to approve reforms, unlock funds

VALLETTA, April 7 (Reuters) - Greece’s international lenders are ready to send experts to Athens who will sign off on the country’s reforms, helping to unlock new lending, euro zone officials said.

Greece is on its third bailout from euro zone governments since 2010, but to get money it has to pass regular reviews of its reforms by teams of experts sent by the lenders, called missions.

The latest review has been dragging on since the middle of last year. Discouraged by the slow progress of talks, the missions have left Athens.

“There will be an agreement today on the missions returning to Athens, there is significant progress reached on the package (of reforms),” one euro zone official with insight into the negotiations said.

The chairman of euro zone finance ministers, Jeroen Dijsselbloem, told reporters as he entered a meeting of the ministers in Valletta that he was optimistic and that there were “results” in the negotiations, but that he wanted to inform the ministers first.

Once the experts go back to Greece, they will complete what is called a “staff level agreement” on reforms in exchange for loans. This is necessary for the ministers to give a political go-ahead to close the whole review and disburse loans.

European Commission Vice President Valdis Dombrovskis said on entering the talks that closing the whole review would hopefully be possible “within the next few weeks.”

The agreement is to include reforms of pensions, income tax, collective bargaining systems and energy market liberalisation.

They are all supposed to produce a budget surplus before debt servicing of 3.5 percent of gross domestic product in 2018, 2019 and 2020. The bailout programme ends in mid-2018.

Greece beat its primary surplus target in 2015 and 2016 and is likely to exceed it again this year. It needs a quick deal on new loan disbursements to pay debts due in July.

But while institutions representing euro zone governments believe Greece will easily reach the 3.5 percent target in 2018, 2019 and 2020, the International Monetary Fund has been sceptical. Euro zone governments, led by Germany, want the IMF to join the bailout to exert more pressure on the Greeks to carry out the reforms.

“It is true that the IMF was always a little bit too pessimistic in recent years, compared to reality,” German Finance Minister Wolfgang Schaeuble told reporters on entering the meeting of euro zone finance ministers.

“The biggest stretch of the road is already behind us, but the experts are always very precise, so it could need some more days,” he said. (Additional reporting by Tom Koerkemeier, editing by Larry King)

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