Dijsselbloem sees ‘political discussion’ leading to agreement on Greece in April or May (upd)

Eurogroup President Jeroen Dijsselbloem on Tuesday said that he expected a political discussion on Greece, which would lead to a comprehensive agreement at either the April 7 or May Eurogroup meetings. Dijsselbloem was speaking to MEPs on the European Parliament’s Economic and Monetary Affairs Committee in Brussels.

Monday’s Eurogroup had agreed that talks between Greek authorities and the institutions must be intensified, he said, with face-to-face meetings in Brussels in order to focus and agree on the main issues of the review that are still pending. Following this, he added, all the remaining pending issues must be finalised in a political discussion that will be held during the Eurogroup on April 7 or else the following Eurogroup in May.

Dijsselbloem said that the institutions are asking Greece to adopt a series of structural reforms in advance in order to make the country’s economy more robust and friendlier to growth, as well as a series of “positive” measures in the case that fiscal targets are exceeded. He noted that labour law was a key part of the negotiations and the reforms in the sector must be in accordance with optimal European practices.

At another point in the discussion with MEPs, Dijsselbloem said it would be preferable to spend as little as possible of the 86 billion euros available to Greece under the third programme. He was replying to independent Greek MEP Notis Marias, who asked whether the unused capital might be used to recapitalise Greek social insurance funds and deal with non-performining loans.

“The aim must be to not use all the money; the more that is used, the more will pass through loans to Greece, increasing its already high public debt,” he pointed out.

On the pensions front, Dijsselbloem said that an effort was underway since February to place less emphasis on austerity and more on cutting costs, with deep reforms for a more sustainable pension system. This must then be complemented by a better social welfare system that functioned in the right way,” he added.

Regarding NPLs, the Eurogroup president noted the use of private capital to recapitalise Greek banks, while noting that he’d be the first to admit that Greece’s economy had not yet recovered. The aim, he said, was to bring about recovery while implementing the programme with as few loans as possible.