Eurozone Finance Ministers to Hold May 9 Meeting on Greece
28 Abril 2016 - 11:40PM
Dow Jones News
BRUSSELS-—Eurozone finance ministers will hold an extraordinary
meeting May 9 to try to complete a deal for Greece's bailout, a
spokesman for Dutch Finance Minister Jeroen Dijsselbloem said late
Thursday.
A tentative meeting for Thursday was called off when talks
between the two sides ran into difficulties.
Mr. Dijsselbloem, who presides over the meetings of eurozone
finance ministers, said Wednesday that creditors need a little more
time to work with Athens on the legal possibilities for a
contingency mechanism that would trigger further austerity if
Greece misses targets.
The additional time would also give officials the opportunity to
discuss what is possible to deal with Greece's debt burden,
according to Mr. Dijsselbloem.
Greece's creditors—eurozone governments and the International
Monetary Fund—have been at odds for months about Greece's economic
outlook and the scope of the overhauls it needs, with the IMF
pushing for further austerity for Athens to meet its budget
targets.
To resolve the standoff, eurozone finance ministers said last
Friday Athens would have to come up with and put into law extra
austerity measures worth 2% of gross domestic product—or about €3.6
billion (about $4.1 billion). The additional savings would be
triggered only if the government missed its promised budget
targets.
But the Greek government and the IMF have since been at
loggerheads over how to find the so-called contingency measures, or
additional austerity, if Greece misses its budget targets.
Finance Minister Euclid Tsakalotos has argued since last weekend
that the savings should come by trimming public spending across all
government departments if Greece's fiscal watchdog says it is
needed. But the IMF wants the set of extra austerity measures to be
specified before talks on the ongoing review of Greece's bailout
can conclude.
The Greek government, however, says legislating the measures
upfront isn't legally possible and instead has proposed a mechanism
that would be automatically triggered when the country missed its
targets.
Underscoring the differences that persist between the country's
lenders, Pierre Moscovici, the European Union's economic affairs
commissioner, supported the Greek government's view, saying that
the extra austerity package doesn't need to be detailed or
specified upfront.
"The mechanism is a way to have measures if necessary, but in
our view we don't need a precise, detailed set of measures," Mr.
Moscovici told reporters earlier Thursday.
Legislating an extra set of painful economic overhauls now could
also be politically challenging for the Greek government, which
will have to get these measures through an already thin
parliamentary majority.
"It is certainly difficult for any parliament or government to
legislate upfront for eventual measures to be taken in three years
from now," Mr. Moscovici said.
Greek and EU officials had hoped an agreement could be reached
quickly and approved by eurozone finance ministers on Thursday, but
that meeting was called off after the two sides failed to reach an
agreement over the contingency measures over the previous days.
The currency bloc's finance ministers, who met in Amsterdam last
week, said they would reconvene once Athens and its creditors
reached a deal on the package of austerity measures Greece must
implement in exchange for fresh loans under its up-to-EUR86-billion
bailout.
Greece needs financial aid by July, before large debts fall
due.
The ministers said that if agreement is reached on the new
measures, they would meet again to sign off on the deal and start
politically sensitive discussions on reducing Greece's debt
burden.
Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com and
Nektaria Stamouli at nektaria.stamouli@wsj.com
(END) Dow Jones Newswires
April 28, 2016 22:25 ET (02:25 GMT)
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