Tsipras seeks French help to get money from stalled bailout

epa05254342 Greek Prime Minister Alexis Tsipras (C) waits for the arrival of Portuguese Prime Minister Antonio Costa (not pictured) for a meeting at Maximos Mansion, in Athens, Greece, 11 April 2016.  EPA/ALEXANDROS VLACHOS


Greek PM Alexis Tsipras will seek help from French President Francois Hollande after talks between his government and its creditors failed — again — to produce the approval needed to release funds from his country’s third bailout.
Tsipras will meet his French counterpart in the Elysee Palace with Greek officials still struggling to convince inspectors from the European Commission, the ECB and the IMF to sign off on the first review of the rescue program. Staff from the creditor institutions are taking a week-long break from their talks in Athens to attend an IMF meeting in Washington.
“The government is once again employing its usual tactics in trying to raise the negotiation to a more political” level, in a bid to bypass technocrats’ objections, Paris Mantzavras and George Grigoriou, analysts at Athens-based Pantelakis Securities, wrote in a note to clients on Wednesday.
Hours before Tsipras’s Paris trip was announced on Tuesday, Finance Minister Euclid Tsakalotos said the government will submit bills on tax and pension reforms to parliament next week, even though they haven’t been approved by creditors. Tsipras pledged not to take “unilateral” actions when he signed his country’s latest bailout agreement last year. Tsakalotos is aiming to get the creditors to endorse changes to pensions, taxation and management of non-performing loans before euro-area finance ministers meet on April 22. “What happens at a technical level is always secondary, the music is elsewhere,” Greek Minister of State Nikos Pappas, Tsipras’s closest aide, said in an interview last week. “Many countries have an interest in keeping Greece stable.”

Market Selloff
The failure to reach an agreement has weighed on Greek assets. The Athens Stock Exchange is the worst performing of all major equity gauges tracked by Bloomberg in April while Greek bonds are the second worst performers this year, after Portugal.
Greek stocks and bonds fell on Wednesday, with the ASE index dropping 1.7 percent and yields on 2-year notes rising 87 basis points to 12.03 percent in Athens.
Officials in the Greek capital say the review has been delayed because the IMF doesn’t think Tsipras’s proposals for additional budget savings go far enough and takes more a pessimistic view of the economic economy than the European Commission.
European Economic Affairs Commissioner Pierre Moscovici said he will seek progress on reducing Greece’s debt burden, a bone of contention between the IMF and the euro area, at the meetings in Washington, according to an interview in Le Monde newspaper published Tuesday. European Stability Mechanism chief Klaus Regling said Tuesday that Greek reforms can help it reach debt sustainability without nominal haircuts on its loans.
Tsakalotos said on Tuesday that Greece is still a sovereign nation and will make its own decision about how to reach its budget goals. The two bills on taxes and pensions will each yield budget savings of 1 percent of gross domestic product. “We want an agreement that satisfies all the creditors but also covers our red lines,” he said.

Leave a Reply

Send this to a friend