Even though negotiations between Greece and the international institutions paused Tuesday, the Greek government presented its plan to submit to the Greek parliament the pension and income-tax legislation next week. There have been no official reactions by the IMF or European officials so far but the Greek Prime Minister, Alexis Tsipras will meet today both with Martin Schulz in Brussels and then with François Hollande in Paris.
The minister of Finance, Eucild Tsakalotos will visit Washington on Thursday for the annual spring meeting of the IMF. During his trip, he is expected to also hold meetings with Jack Lew, United States Secretary of the Treasury, Christine Lagarde, managing director of the IMF, Mario Draghi, president of the European Central Bank (ECB) and Jeroen Dijsselbloem, president of the Eurogroup.
After these developments, the agenda of the Greek parliament has been changed accordingly. The planned discussion on bank lending of political parties and media has been postponed.
During a joint press conference, when the key points of the proposed bills were presented Euclid Tsakalotos told reporters “as a sovereign country we maintain the right to decide how we are going to reach the targets” set by the country’s bailout agreement.
Klaus Regling, the managing director of the European Stability Mechanism, the eurozone bailout fund, spoke to The Wall Street Journal about the ongoing negotiations between Greece and its international creditors and potential ways to relieve the country’s debt load. Among other things, he commented on the timeline of the negotiations: “Under the best of circumstances these are technically and politically difficult issues. And that’s why it is very difficult to say whether this takes another two weeks or another four weeks. But I think it is not unrealistic to expect that over the next four weeks this is going to conclude”.
According to Reuters, the IMF still describes Greek debt as “highly unsustainable” and wants European partners to grant Athens a substantial debt relief. Reuters reports on a draft IMF memorandum that projects an average rate of economic growth of 1.25 percent for the long term, which is lower than its previous forecast.
In the run-up to the annual spring meetings of the IMF and the World Bank in Washington, the IMF said that for 2017 the global economy would grow 3.5 percent, down 0.1 percentage point from its January estimate.
At his interview with The Wall Street Journal, Klaus Regling commented that “even when we look at debt sustainability one has to find estimates and forecasts for the next few decades and that is difficult. So nobody can claim that one institution has the monopoly of knowing everything that happens over the next two years, so that’s why it’s important to have a good debate”.
Commenting on the issue of debt relief, Germany’s minister of Finance Wolfgang Schaeuble told Reuters: “The agreements of last summer are clear: if the first program review is completed successfully and then the need still arises to do something about debt sustainability, then we will talk about it. So far, I cannot discern from the debt-sustainability analysis a need for debt restructuring. I currently see no need for that”.
About IMF’s participation, Mr. Schaeuble said “We definitely won't let ourselves be blackmailed. We stand by the agreements but others must too”.