Greece calls on Germany to ease budget demands
Greece's government has called on Germany to drop what it described as "irrational" budget demands in the country's bailout programme, a day after Greece and its European creditors agreed to resume talks on new reforms.
Spokesman Dimitris Tzanak-opoulos on Tuesday noted the Eurozone finance ministers had made progress at their meeting this week on Greece's bailout. He said there had been "concessions from all sides" on what reforms Greece must make to keep tapping its bailout loans.
"It is now also time for Germany to proceed on the path of realism," said Tzanakopoulos.
He called on Germany to drop its demands that Greece post a 3.5 per cent primary surplus the budget balance minus debt interest costs each year for a decade.
He also called on Germany to "adopt a constructive stance" to reach a deal on some form of debt relief for Greece.
Athens agreed on Monday to implement further reforms that will take effect from the start of 2019, after the country's current third bailout has ended. The government says the measures will be fiscally neutral, with every increase in financial burden being offset by another countermeasure.
Reforms are expected in the labour market, pensions and taxation. Tzanakopoulos said he could not provide any details of the measures or the counter-measures, saying the package was subject to negotiations with the country's creditors, whose representatives are to return to Athens for talks next week.
"Even on the package of reform measures, lots of work still need to be done and various outstanding issues will have to be calibrated," said financial analyst Wolfango Piccoli of Teneo Intelligence. "For instance, the exact fiscal targets have not yet been agreed. This remains a political rather than technical matter, and more work is required before this debate can take place."
Greece had originally hoped to conclude by Monday the latest review of its progress in meeting its bailout conditions.
Only once the review is completed will Greece be able to access the next instalment of its bailout funds, which it needs to meet a €7-billion ($7.4 billion) debt repayment in July. Without the funds, the country will once again face default, throwing its future in Europe's joint currency into question.
Tzanakopoulos said there was no fixed deadline for the conclusion of the review. On Monday, the Eurozone's top official, Dutch Finance Minister Jeroen Dijsselbloem, indicated the creditors were in no particular rush.
"There is no need for disbursement in March, April or May," Dijsselbloem said. "I'm not saying we should use all that time ... but don't create deadlines where there are none."
Greece depended on international bailout funds since 2010. In return for the loans, it has had to overhaul its economy, imposing repeated rounds of spending cuts and tax hikes. The austerity plunged the country into a depression, wiping out more than a quarter of the economy and leaving unemployment hovering at around 23 per cent.