All sides determined to reach agreement by June 21, Greek FinMin Tsakalotos says

All sides are determined to reach an agreement on the Greek programme by June 21, Greek Finance Minister Euclid Tsakalotos said on Thursday.

Speaking to “Sto Kokkino” radio station, Tsakalotos said that the heads of the institutions will return to Athens on May 14 and Greece will reach a staff-level agreement in the next Eurogroup on May 24. The fourth review of the Greek programme will then be concluded at the June 21 Eurogroup meeting in Luxembourg, he added.

“There will leave the two other parts [of the exit package], relating to the type of post-programme surveillance adopted and debt relief, but the faster we wrap up the review, the better,” the Greek finance minister said.

Tsakalotos said that the country’s “comprehensive growth plan” must be “credible to both foreigners and Greeks” and offered examples, such as raising the minimum wage, collective labour negotiations and a social programme in schools and hospitals.

“Growth will not be just for those who gained from the recession,” he said, adding that society must participate in any gains made. Referring to reforms, he noted the need to strengthen the investment climate, speed up justice and combat bureaucracy.

Commenting on the type of post-programme surveillance that will be adopted in Greece, Tsakalotos said this will have no prior actions though the monitoring of Greece “might be a little closer” than that of other EU countries. “There is surveillance of targets and surveillance of means in the programme. The institutions will have a say on some major reforms but not a big say on how you get from 3.5 pct of GDP to 2.0 pct. We will have the biggest say concerning the means,” he said.

Asked whether the high primary surpluses targets might change, Tsakalotos noted that Greece must first wait and see on what terms it will exit the programme and strict surveillance, what is decided on debt relief and whether the Macron agenda is adopted.

He noted that short-term debt relief measures have had a much greater impact than anticipated. The medium-term measures concern the purchase by the European Stability Mechanism (ESM) of the expensive debt to the IMF and the extension of bond maturities, along with the “French mechanism” linking this extension with Greek economic growth rates.

“The disagreement is that the Germans want this link to be conditional. This, in my opinion and in the opinion of the four institutions, is contrary to a Eurogroup decision on debt relief,” he said, adding that the IMF did not want any conditions attached. “What we get must transform Greece from a uniquely over-indebted country to a indebted country on a par with Italy, Spain, Portugal, which borrow at low cost,” he noted.

“The IMF can help us to get more on debt, or it might think that we are not getting much and leave. We do not adopt any position at this time…One of the reasons I am optimistic is that the IMF wants to participate in the programme more than the Europeans do. And this is the optimism that the IMF won’t be able to impose irrational things,” he said.

The finance minister left the door open for the government to request a postponement of a pension reduction in 2019, saying: “The government’s position is that it was not the time for this discussion. We must conclude the fourth review, the kind of surveillance and the debt and then we will look at it”. Commenting on the 88 prior actions in the fourth review, Tsakalotos said there were some with technical difficulties that may be delayed, “but that has nothing to do with an extension of the programme”.

Tsakalotos said he was in favour of having general elections in 2019 when the country will have higher employment and growth, compared with 2017 and 2018.