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EU sources optimistic of first review of Greek program in April

By Nikos Bellos

The return this week of representatives of institutional creditors to Athens means they’ll remain until negotiations conclude over the first review of the Greek program (third bailout), an EU source in Brussels said on Wednesday.

The same source considers that a conclusion of the review is possible in April, before Orthodox Easter on May 1.

Moreover, Union circles in Brussels have underlined that the review must include an agreement on all issues, i.e. pension reform, fiscal adjustment, NPLs and privatizations. 

Two main reasons are given as the reason for a comprehensive agreement: The first has to do with bailout installments, which mean that national parliaments of euro zone members must approve the payments, and as such, lawmakers of creditor countries want to see a comprehensive review.

A second reason deals with the standing and controversial issue of lessening the Greek debt, with talks to reportedly commence after the first review is completed.

In order to determine Greece’s lending needs vis-à-vis its debt obligations over the coming decades, creditors want to calculate the future costs of the pension system and to ensure fiscal budget discipline. Additionally, proceeds from projected privatizations will also head towards reducing the debt, and as such, creditors want to put a figure in this column.

Reserved optimism this week in Brussels stems from the fact that the IMF has reportedly “softened” its position regarding projections of a Greek budget deficit, whereas progress has been recorded on other issues as well.

If the total “bill” of extra revenue (taxes) measures totaling 3 percent of GDP over the 2016-18 period is finalized, as the Greek side wants and expects, then the only remain outstanding issue is non-performing loans.