Monday’s Eurogroup in Brussels proved inconclusive as far as the Greek review is concerned but did result in some hope that efforts to conclude the review would intensify in the coming days.
Greece and its lenders head into Monday’s Eurogroup with differences on several key issues that will have to be resolved if the second review is to conclude in the days ahead.
Speaking to Parliament’s Economic Affairs Committee, Finance Minister Euclid Tsakalotos said on Thursday that the agreement with the institutions would be difficult but would also have “positive surprises,” which could pave the way for QE from the European Central Bank and lead to sustained growth.
One of the key issues still to be resolved in the ongoing negotiations between the Greek government and the institutions relates to the International Monetary Fund’s demand for a reduction in the tax-free threshold with the aim of securing additional revenues of 1 percent of GDP (1.8 billion euros) as of 2019.
The latest round of negotiations between the Greek government and the institutions’ mission chiefs in Athens, which began on February 28, concluded on Thursday.
Further progress was made during meetings between the Greek government and the institutions’ mission chiefs on Wednesday, with Finance Ministry sources saying that the out-of-court workout issue has been settled.
Following the small progress made during Monday’s talks, Greek government sources appeared more optimistic after Tuesday’s meetings noting that a “quite large agreement” has been reached on many issues.
Following a series of inconclusive meetings over the previous days, some progress was apparently recorded during discussions between Greek ministers and the institutions’ mission chiefs on Monday evening.
Despite two meetings over the weekend on fiscal and labour market issues, the Greek government and the institutions’ mission chiefs were unable to bridge their differences, creating more doubts about when an agreement may be reached.
The third day of discussions between the institutions’ mission chiefs and the Greek authorities included two meetings that focused on the out-of-court workout and active employment policies.