Greece is very unlikely to complete the bailout program review by the February 20 Eurogroup, with European officials speaking of a possibility of a March agreement.
The positive outcome of Friday’s meeting between Greek Finance Minister Euclid Tsakalotos and creditors’ representatives was that the institutions agreed to return to Athens to resume negotiations, but no date was set. As for the February 20 meeting of euro zone finance ministers, Eurogroup President Jeroen Dijsselbloem said that only the progress of talks will be discussed at the session.
Greek government officials, however, spoke of unreasonable demands from the International Monetary Fund that would hinder negotiations. Despite the rather optimistic announcement by Dijsselbloem, who said Greece has made progress in implementing the program prerequisites, Athens seems to insist that it would not accept the IMF terms.
“The timely completion of the second evaluation is in the interest of all sides. We will evaluate further progress of the second evaluation at the next Eurogroup,” Dijsselbloem said.
Creditors placed a joint proposal on the table, asking for immediate legislation of amounting to 2% of GDP, (3.6 billion euros). The specifics will be discussed when the institutions return to Athens to resume negotiations. At the same time, creditors will offer Greece some compensatory measures in case Greece surpasses fiscal targets set.
Reportedly, the IMF “unreasonable” demands, as Greek officials have called them, include the lowering of the tax-free income threshold to 6,000 euros and a further 30% cut to the personal difference in pensions. Furthermore, the Fund asks that the new tax-free threshold should apply from January 1st, 2018.
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