wnol.info May 20 2018

German parliament must decide if Greek deal a fundamental change - Schaeuble

May 20 2018, 05:33 | Alonzo Simpson

Pierre Moscovici, the European Union's top economy official said it's time for the Greek people to see the "light at the end of the tunnel of austerity" and that this Eurogroup meeting could be "very positive for Greece and the Greek people".

The IMF's Lagarde suggested last week that the Fund may join the bailout "in principle" on the strength of the implemented reforms, but wait on disbursing its own money to Athens until details of the 2018 debt relief are clear.

The standby arrangement was a second best solution to a full debt deal, Lagarde said, but it would buy the euro zone, Greece and the International Monetary Fund time to work out the details for next year.

While conceding that Greece didn't get everything it wanted, Tsakalotos said the country could now turn the page on its bailout era.

"I remain confident that we will find an agreement today on the payment of the latest tranche".

Christine Lagarde, the IMF's managing director, will now propose its partnership to her executive board in Washington, which has the final say.

The Greek government now needs $8 billion to meet a debt repayment deadline in July.

"We recognize that we did not want the flawless to be the enemy of the good", he said.

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In short, the International Monetary Fund will give a green light to its participation, and approval of the country's economic reform program, but Greece will not see a penny until Europe provides details on the debt relief plans.

The 8.5 billion euros of loans from the euro zone's 18 other states, including Berlin which is wary of easing terms for Greece ahead of a German election in September, lets Athens avoid defaulting on bailout repayments next month and recognises unpopular cuts and reforms the left-wing government has made. Some debt repayments could be delayed by 15 years.

The expectation is Greece will get the roughly 7 billion euros ($7.8 billion) due, but will struggle to clinch the outlines of a debt relief deal that Prime Minister Alexis Tsipras thinks is crucial for the country's economy in the long-term.

The IMF's participation in Greece's €86bn bail-out deal was a key requirement for countries such as Germany.

The Eurogroup has welcomed reforms adopted by Greece's parliament - covering areas such as pensions, income tax, the labour market as well as the financial and energy sectors.

The IMF and the euro zone have widely different forecasts for Greek growth in the decades to come and on Athens' ability to achieve high primary surpluses - the budget leftover not including debt servicing costs - to solve its financial crisis.

The IMF has so far refused to join in this bailout, Greece's third since 2010, because it believes that without relief Greece can not get out from under its massive debt mountain. "Now it is time for the Europeans to comply with their commitments on debt relief", Greek President Prokopis Pavlopoulos said in an interview with German daily Handelsblatt.

On Thursday, some 1,500 pensioners protested in Athens against more than a dozen rounds of pension cuts since austerity was enforced seven years ago. "I was taking 2,400 euros in 2011, now I take [a pension] of 1,000".

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