ATHENS: Bailout negotiators have returned to Greece to try and reach a deal by the end of the year on the terms for the next loan payout, as the debt-plagued country prepares to end eight years of rescue funding programs next summer.
At meetings Monday with finance ministry officials, the envoys from European Union institutions and the International Monetary Fund started discussions on a long list of demanded reforms. They include reducing state control of public utilities and an extensive review of government spending in order to meet high budget surplus targets for 2018 and 2019.
Bailout reviews are normally delayed for months as governments push back against demands for austerity. Prime Minister Alexis Tsipras is keen to conclude the current round of negotiations swiftly to help a smooth return to bond markets.
But Athens is already far behind schedule, says Danae Kyriakopoulou, chief economist at the London-based financial think tank, OMFIF. She said the key difficulty is the slow implementation of some 95 outstanding reforms Greece had to make.
“Only around 20 have been implemented so far, which translates into a need of completing more than one per day going forward if they are to be completed by (early December),” she said.
“It’s not just a matter of volume, but also of complexity.”
Greece made a partial return to debt markets in July and is planning several more auctions before the current bailout ends in August 2018. It’s also hoping to be granted more generous repayment terms from bailout lenders as its economy suffers under the weight of a whopping national debt worth some 180 per cent of GDP.
Greek bond yields have fallen sharply since the summer, a sign of increased investor confidence, but they remain considerably higher than those of other Eurozone members.
Tsipras’ left-wing government is trailing badly in opinion polls behind opposition conservatives, with more austerity measures already planned over the next two years despite forecasts of a return to economic growth.
A government spokesman, Dimitris Tzannakopoulos, said the government would not impose any additional cuts beyond those already agreed upon, adding that Greece remains on course to beat budget targets this year and provide up to a billion euros in additional funding for emergency welfare payments.
“The money will be given to those who have been most affected by the crisis,” he told private Antenna television.