Germany stubborn on Greek debt; IMF also accused of sidelining Greek democracy



Greece’s Finance Minister Euclid Tsakalotos has accused the IMF of sidelining the democratic values of the country after the latter demanded that Greece legislates for measures that will be implemented after the end of the current bailout program.

“You cannot request a country to legislate for what it will do as of 2019. In this way, European and democratic values are sidelined,” the minister said, noting that this would commit future governments of a European country.

The comments come after the recent Eurogroup meeting in Brussels where European Commissioner for Economic and Financial Affairs Pierre Moscovici came out with optimistic comments on the Greek economy.

The Greek Finance Minister said all Eurogroup participants recognised that Greece has made great progress and that the Greek economy can achieve growth.

“In all the meetings, we found common ground. Greek growth is doing much better than many expected,” he said.

He then asked to consider the IMF’s demand for legislating precautionary measures that concern the period after 2018, saying if the country is making such progress, “new measures are not so necessary”.

Meanwhile Eurogroup President Jeroen Dijsselbloem said that the Greek economy was recovering more quickly than expected, with Greece set to surpass fiscal targets in 2016.

"We encourage them to continue in this way and implement reforms," he said.

Dijsselbloem said the Greek economy had entered a path of growth and fiscal reform and that there was a "joint interest" in rapidly completing negotiations to conclude the second review of the Greek programme.

On its part the IMF is still at odds with Germany over Greece’s debt claiming now it is unsustainable and is preparing a final decision to not finance the Greek programme.

Greece's debt will be discussed at an International Monetary Fund (IMF) executive committee meeting on February 6, reliable sources reported on Thursday, noting that the fund's political disagreement with Germany continues.

The debt sustainability report to be presented at the meeting says that Greek debt can't be considered sustainable even if Greece adopts the fiscal path proposed by German Finance Minister Wolfgang Schaeuble, namely 3.5% of GDP primary surpluses for a 10-year period.

GCT Team

This article was researched and written by a GCT team member.