Bailout inspectors to return to Greece to finish review

BRUSSELS — Greece’s bailout inspectors were cleared Monday to return to Athens to complete a much-delayed review of the government’s adherence to its economic reform commitments that if successful will pave the way for discussions on relieving the country’s debt burden.

Jeroen Dijsselbloem, the Dutch finance minister who is also the eurozone’s top official, confirmed the return of the so-called mission chiefs to the Greek capital as soon as Tuesday as there is “enough common ground” between the two sides.

“We stressed that more work needs to be done, more effort needs to be put in for there to be a good outcome,” he said after a meeting of the eurozone’s 19 finance ministers in Brussels.

Though the Greek government has delivered on much of what’s been asked of it over the past few months, it has stumbled on one key measure: pension reform. The Greek government wants to protect payments and hike contributions — drawing major protests from professional groups, from farmers to lawyers and undertakers.

A successful review of the reforms demanded in the country’s latest bailout program is needed to release more rescue loans for Athens to pay its debts — the next big repayment is due to the European Central Bank in July — and to kick-start discussions on how to reduce Greece’s debt burden.

Dijsselbloem confirmed that the debt discussions could take place soon and will inevitably be part of discussions about the next stage of Greece’s bailout program.

In light of a “long-standing promise” to make Greece’s debt servicing manageable if commitments were met, Dijsselbloem confirmed that those discussions “will be on our table in the near future.”

Greece has been unable to fund itself for around six years and has had to rely on bailout loans from its partners in the eurozone and the International Monetary Fund to avoid going bankrupt. Last July, the newly elected Greek coalition government of left-wing Prime Minister Alexis Tsipras, agreed to the country’s third bailout since 2010. A further 86 billion euros ($94 billion) was made available to Greece, but would only be released if targets were met. Around a quarter of that has already been disbursed.

Following a recession that’s seen Greek economic output shrink by around a quarter, Greece’s debt stands at around 175 percent of the country’s annual GDP — way more than any other country in the eurozone and considered to be unmanageable.

The IMF, which has yet to commit to Greece’s third bailout program as its previous support package has yet to expire, has argued strongly in favor of a big debt relief package for Greece and has suggested that the forecasts that the Greek bailout is based on are too rosy. Though an outright reduction in Greece’s debt — a so-called haircut — has been ruled out by eurozone creditors, some help could be provided in the form of extending the timetable that loans have to be repaid and/or by cutting the interest rate payable on those loans.

“We look forward to discussions, closing in a timely manner the first review and having a discussion on debt,” Greek Finance Minister Euclid Tsakalotos said. “I am sure that sensible people, when they get across the table, will find a sensible conclusion.”

Worries over Greece have re-emerged in the past few weeks partly because the left-led Greek government only has a small majority in parliament, which makes it more difficult to deliver the reforms required from it by creditors.

The country is also facing huge problems dealing with a stream of migrants, many of whom are escaping war-torn Syria. Just a few hundred meters away from where the finance ministers held their meeting, European leaders met with Turkish government officials on how to deal with the migrant crisis and how to help Greece on that issue.

Dijsselbloem didn’t sound as though the eurozone will be taking that into account in the coming weeks and months.

“They need help and that is what Europe is doing, but this is totally detached from the economic program,” he said.