By T. Tsiros
A delay of several days in commencing negotiations between the Greek government and representatives of institutional creditors over a second review of the Greek program (third bailout) was reportedly greeted with heightened skepticism in Athens this week.
Although no official statement was issued, the loss of four days’ worth of talks towards concluding the coveted second review was viewed as a negative development, especially after a decision last week by the Eurogroup to divide a 2.8-billion-euro sub-tranche in bailout loans into two disbursements.
Negotiations were set to begin on Tuesday, but were bumped back to the end of the week.
The delay also comes amid the ongoing, and very public disagreement between official Berlin and the International Monetary Fund over the Greek program, especially conflicting views over whether debt relief is necessary in the very near future to ensure the “sustainability” of Greece’s debt – now mainly held by institutional creditors, the EU Commission, ECB, SSM and the IMF.
An increasingly embattled leftist Greek government is basing much of remaining political “capital” on achieving some sort of debt relief, even with short-term measures, this year. That goal, however, is dependent on successfully and quickly completing the current review process. As such, any perceived delay is viewed with apprehension by the Tsipras government.
Any delays in the current process will essentially mean that whatever debt talks will commence in 2017, a prospect that leaves very little for Greek Prime Minister Alexis Tsipras and his top ministers to present to its supporters as a success this year.
As such, Athens appears to be caught directly in the middle of a still unresolved argument between the IMF and the Merkel government.
The Washington-based Fund has vociferously demanded immediate debt relief measures and more “realistic” fiscal targets by Greece after 2018, in order to participate in the Greek program with funding.
The German position, as repeatedly voiced by influential Finance Minister Wolfgang Schauble, maintains that any discussion over Greek debt relief come after 2018, when the current bailout program ends and results are evaluated.