Monday, May 9, 2016

Euro Group meeting: Negotiations with Greece are progressing – FAZ – Frankfurter Allgemeine Zeitung

The Austrian Finance Minister Hans Jörg Schelling said on Monday before the special meeting of euro finance ministers on Greece in Brussels, which is probably all thought, “No one is interested to repeat the summer of last year.” For months, had the finance ministers of the other euro countries with the then Greek Finance Minister Yannis Varoufakis wrestled before the departure of Greece was avoided from the euro area. For “Grexit” lacked much. For some time spoken by Grexit again in Brussels.

Hendrik Kafsack  Author: Hendrik Kafsack, economics correspondent in Brussels.

the more the participants of the Euro group struggled on Monday to spread optimism. Later this month, an agreement on the required reforms and an eventual debt relief was possible Euro group chief Jeroen Dijsselbloem said. “We will try to achieve a breakthrough at the next meeting on May 24″

Similarly, remarked German Finance Minister Wolfgang Schäuble (CDU). “I am still confident that we will reach a solution in May,” he said in Brussels.

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in fact, the Euro group is progressing “quite a bit” (Schäuble) on a. The first of the necessary agreement for three steps is apparently done. The finance ministers agreed that the government in Athens has implemented the major part of the required reforms for the completion of the outstanding since the fall of the first review of the third aid program following the decisions by Sunday evening.



Up to 86 billion Euro

the Greek parliament on Sunday evening, accompanied by protests, approved pension cuts with a circumference of 1.8 billion euros and increases the income tax also EUR 1.8 billion. Greece is dependent on an agreement to get new support from donors. It’s about another installment in the billions from the comprehensive total up to 86 billion euro aid package

The aim of the reforms is that Greece until 2018 a primary surplus -. A positive budgetary balance excluding interest obligation – of 3.5 percent of gross domestic product (GDP) reached. This should enable the country to reduce the statistical office Eurostat prized for 2015 to 176.9 percent of GDP public debt permanently

unity achieved the euro group on Monday evening via the second necessary step. How the government in Athens can ensure that the country complies with the budgetary targets even in a worse development of economy and budget.

“IMF is a bit more cautious on this issue”

the finance ministers of the other euro states had initially supply decisions concrete reforms required that should be implemented when this development is worse than expected. The Greek Government rejected this because such decisions can not be reconciled in her estimation the Constitution

Now is the Euro Group satisfied that a new mechanism is provided which responds to a bad budget situation with automatic spending cuts. This corresponds largely to the Greek proposal. However, these spending cuts are to be replaced by the government through structural reforms.

reason for the debate is that the International Monetary Fund, the expectations of EU creditors does not share that agreed last summer reforms to a primary surplus cause of 3.5 percent of GDP. “The IMF is a bit more cautious, more conservative on this issue”, Dijsselbloem said. The IMF director Christine Lagarde had the 19 euro finance ministers invited in became known during the weekend letter, not one-sided to focus on reforms and savings, but also to talk about debt relief.



Christian Lindner for euro exit of Greece

The Euro group reaffirmed on Monday that is that it excludes a nominal haircut still categorically. They showed up at the same time prepared to make concessions, so that the IMF can continue to participate in the program. Euro group chief Dijsselbloem said after the meeting, the euro zone finance ministers were willing to talk about short-term, medium-term and long-term steps to reduce the debt burden.

In the short term, that applies primarily about optimizing the load, for instance by an adjustment of interest rates. In the medium term provided the Dutchman longer maturities in view. Furthermore one can talk after the end of the program 2018th In addition, the Euro group was ready long – after the expiry of the loans – to adopt additional measures, if was necessary. Details, however, did not name Dijsselbloem it.

The Euro Group chief made clear, however, that he has no doubt that there must be a further adjustment of the debt burden. Federal Finance Minister Schaeuble reiterated, however, before a decision has to be clarified whether debt relief was needed at all. Meanwhile, urged the chairman of the FDP, Christian Lindner. the euro exit of Greece.

“Greece needs a fiscal restart without Euro”, “but then with a haircut and with earmarked EU aid.” he told the “Bild” newspaper,

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