Gov't eyes new relationship with creditors, debt talks

Gov’t eyes new relationship with creditors, debt talks

With troika envoys due to return to Athens in the coming days for talks on pending reforms, the government is seeking to finalize its position on key issues with an aim to shifting the debate to the prospects for putting Greece’s relationship with foreign creditors on a different footing and to discussing debt relief.

Athens is keen for talks on debt relief and on a “post-memorandum” era to be completed by the end of January, well before scheduled presidential elections which could lead to snap polls if the coalition fails to garner an enhanced majority for its candidate, Kathimerini understands.

Greek authorities have insisted that the country can go it alone next year, after the European arm of a loan program ends, foregoing some 12 billion euros in funding from the International Monetary Fund and seeking to tap the capital markets instead. Both the IMF and Greece’s eurozone partners, however, have said Greece will need some help getting back on its feet. European officials are determined that Greece should retain some kind of credit line but indicate that this support should come with conditions attached, something that Athens is keen to avoid as this raises the specter of a third program.

Sources spoke of an “enhanced conditions credit line,” noting that this would chiefly be comprised of 11.4 billion euros in residual funding from the recapitalization of Greek banks. There would also be a new agreement between Greece and the eurozone which would not be christened as a memorandum but would come with certain terms attached. The exact nature of this “new relationship” between Greece and the eurozone is expected to be discussed at a Eurogroup summit today.

Meanwhile the government must make good on a series of economic reforms which it has pledged to the troika if it is to secure 7.1 billion euros in loans.

Technical staff from the troika are due in Athens this week to check on progress while mission chiefs will only return once the government has sent them its final positions on key structural reforms. The government is keen to avoid a contentious second phase of reform to the pension system and is expected to push through changes to laws governing trade unions instead, making it harder for them to hold strikes.

Meanwhile in comments over the weekend, SYRIZA leader Alexis Tsipras called again for snap elections so that the leftists can come to power and seek to renegotiate Greece’s loan agreement with its international creditors. Addressing a summit of the Party of the European Left in Athens on Saturday, Tsipras said SYRIZA’s chief aim remained to seek a writeoff of the bulk of Greece’s debt burden, which stands at nearly 175 percent of gross domestic product, and to demand the return of a forced loan issued by the Bank of Greece to the Nazi regime during World War II. The leftists will also seek to freeze Greece’s loan repayments to the country’s international creditors so that funds can be pumped into boosting the economy, he said.

“They don’t want to admit that their experiment has failed and so they attack the worn-down guinea pig with ever-greater zeal,” Tsipras said of Greece’s creditors.

   
   

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