Report: Positive meetings on Greek debt in Washington

The second review of the Greek programme and the debt issue will be probably discussed at the last eurogroup meeting that will probably be held on December 7, said a top official of the finance ministry staff in Washington after Finance Minister Euclid Tsakalotos and Alternate Finance Minister Giorgos Chouliarakis' meetings on the sidelines of the annual IMF and World Bank's meeting. IMF chief Christine Lagarde said to Tsakalotos that the fund's rules do not change and the two conditions for IMF's return to the Greek programme are 'a strong programme' and the debt's sustainability. The same official noted that there is no agreement between Lagarde and German Finance Minister Wolfgang Schaeuble on the Greek debt underlining that the German minister has a legalism approach regarding the 25 May agreement. Schaeuble supports that IMF's sustainability report (DSA) on the debt is the basis for IMF's participation and not the prerequisite, a view that the Greek side also rejects.

According to the Finance Ministry official the Greek delegation's general feeling after the completion of the meetings in Washington is that now there are more players in the game that seek the rapid completion of the second review and the solution for the Greek debt than those who avoid it. The Greek government has requested the return of the IMF to the Greek programme. He said that there will be a huge problem if the measures on the mid-term and long-term part of the debt are not set and are postponed to next summer. In this case uncertainty will prevail and the investments will be harmed and Greece will not be included in ECB's QE programme. He also noted that there are countries (Finland, Austria, Netherlands) that want IMF's participation in the programme and this is something positive because it engages institutions as the eurogroup. The issue of the reacquisition and reprofiling of the old debt by ESM was not discussed in the meetings in order afterwards the IMF to participate in the programme with smaller amounts.

The labour issue that is included in the second review was not discussed in Tsakalotos-Lagarde meeting The Greek side seeks the reduction of the primary surpluses after 2018 to be included in the negotiation for the debt issue in order a fiscal space to be created, the tax rates to be reduced and the expenses to increase. Government's effort is to prove that the lower primary surpluses are compatible with a measured interpretation of the mid-term restructuring package of measures provided in 25 May eurogroup's decision. The approval for the disbursement of the 2.8 billion euros tranche to Greece is expected in Monday's eurogroup as the institutions' representatives report says that all prior actions of the first review have been met and there are no pending issues. The representatives of the institutions will return to Athens in October 18 to start negotiations on the second review. The government believes that the second review should be completed on time in order excuses or delays in the discussion for the debt to be avoided. "Our aim is the second review to be completed until the end of November" said the same official. 

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