BRUSSELS: Eurozone finance ministers hold an emergency meeting on Monday (Tuesday in Manila) to try to thrash out a difficult deal on fresh reforms for Greece as fears grow of a repeat of last year’s chaotic bailout negotiations.
The ministers from the 19 countries that use the euro—the Eurogroup—will also discuss debt relief for Greece, which the International Monetary Fund (IMF) has demanded as a condition for a new agreement.
The clock is ticking to complete the long-stalled first review of Greece’s 86-billion-euro ($95 billion) EU-IMF bailout so cash-strapped Athens can unlock billions of euros to pay the European Central Bank (ECB) in July.
Tensions are rising. Greece was paralyzed at the weekend by a strike to protest government plans to overhaul pensions and increase taxes as demanded by its international creditors.
Greek Finance Minister Euclid Tsakalotos on Saturday urged eurozone countries to approve his economic program—and warned darkly of the potential cost if the talks ran aground.
“Nobody should believe that another Greek crisis, leading perhaps to another failed state in the region, could be beneficial to anyone,” Tsakalotos said in a letter seen by Agence France-Presse.
In its official agenda the Eurogroup said it would discuss the “progress achieved” by Greek and creditor officials in recent days on the reforms, “with a view to conclude them as soon as possible.”
It added that it would “also discuss possible debt relief measures aiming at ensuring that Greece’s gross financing needs remain at a sustainable level, with a view to reach a political agreement.”
“Both elements need to be in place in order to finalize the program’s first review and unlock further financial assistance to Greece,” it said.
European Commission head Jean-Claude Juncker said in an interview to be published Sunday in Germany, that Greece has “basically achieved” the objectives of the reforms required by its creditors, adding that “discussions about how to make Greece’s debt sustainable in the long term” would be on the agenda.
But the ongoing negotiations between Athens and its EU-IMF creditors are currently stuck on a demand that Greece commit to an extra set of reforms in case it misses its spending targets in 2018.
These so-called contingency measures are a key demand of the IMF to complete the bailout’s first review, as the Fund is skeptical Athens will meet the targets.