By D. Hatzinikolas
Greek Finance Minister Euclid Tsakalotos told members of a top ruling SYRIZA party council on Wednesday that neither he nor the leftist government will back down from creditors’ demands over labor sector liberalization or new austerity measures to achieve high fiscal targets after 2018.
The statement, as conveyed by government sources, came after a closely watched Eurogroup session on Monday finally announced more-or-less short-term debt relief measures for Greece, although initial enthusiasm – at least on the part of the Tsipras government and its supporters — was dampened by the fact that the measures have a timetable extending to far-off 2060.
In terms of the very pressing present economic situation, Eurozone finance ministers and representatives of institutional creditors’ essentially reconfirmed the latters’ demand for high fiscal targets reaching up to a decade. Targets in this case refer to primary budget balances of 3.5 percent a year in relation to Greece’s GDP.
According to reports, the Greek finance minister on Monday again bemoaned what he called the IMF’s unbending stance, singling out top IMF official Poul Thomsen by name.
The increasingly embattled SYRIZA-led coalition government again called the fiscal target over a decade-long duration “unacceptable”. The Greek side also revealed that a Commission compromise, whereby Athens would spell out measures to achieve the 3.5-percent annual target, but over three years, was blocked by Thomsen.
The Danish economist holds the position of director of the IMF’s European Department.
Experienced “Greek program” observers also pointed to the fact that IMF’s country representative for Greece, Delia Velculescu, will not return to Athens this month for negotiations. The former said this belies the leftist government’s tenuous relations with the Fund.
In contrast to last month’s more optimistic outlook over a conclusion to the second review of the Greek program (third bailout), government officials are now referring to “difficulty” in achieving a staff-level agreement before the holidays.
Still pending are negotiations over the now utterly controversial fiscal targets after 2018, medium-term adjustment measures and the standing issue of the Greek debt’s sustainability, an imperative concern for the IMF.
If negotiations drag out, Athens fears, the repercussions could affect the goal of 2.7-percent GDP growth in 2017.
