Disbursement of loans to Greece not linked to debt issue, gov’t spokesman says

The disbursement of the next installment of loans to Greece is not linked to an agreement on the debt, government spokesman Dimitris Tzanakopoulos said on Tuesday in response to questions. He also expressed certainty that the differences between the International Monetary Fund and the German finance ministry can be bridged before June 15.

“There is no connection between the disbursement of the installment and the outcome of the negotiations on Greek debt,” he said.

Asked to comment on a statement by German Finance Minister Wolfgang Schaeuble about the need for a new Greek programme in the event of the IMF’s departure, Tzanakopoulos said that a new programme would not be necessary but only the modification of the existing programme in consultation with Greece’s European partners. He also noted that there was no issue of a new programme for the Greek government.

“What I can tell you is that, if the IMF does not participate in the programme, the European Central Bank and the European institutions will be responsible for the Greek programme and must proceed quickly on the basis of their own rules to the things outlined in the agreements,” he said.

Tzanakopoulos made it clear that the disbursement of the next installment of loans was “clinched” at Monday’s Eurogroup, repeating that Greece has met its commitments and that its partners must now honour theirs.

The government’s confidence that a compromise will soon be found was also shared by the Eurogroup, he pointed out, which said that little time will be needed to bridge the differences between the two sides.

Tzanakopoulos noted the German finance ministry’s repeatedly stated position that the IMF’s participation in the programme was essential.

Asked why the proposal for the debt presented on Monday was rejected, the spokesman replied that both the Greek side and certain of the partners considered that there was a lack of clarity and that the problem was postponed for the future, without a real solution.

“The solution presented at yesterday’s meeting did not correspond either to the targets set in the previous period nor to the sacrifices of the Greek people”, he explained. “In this sense, it was the correct political choice to briefly postpone so that there was a clear path for Greece’s exit from the crisis,” he added.

Asked to explain where the IMF and German finance minister disagreed, Tzanakopoulos said their differences were over both forecast growth rates and primary surplus targets. Germany was asking for a primary surplus target of 3.5 pct of GDP for 10 years. It was also reluctant, in the present phase, to commit to detailed specific measures for making Greece’s debt sustainable, as demanded by the IMF.

He described the compromise reached over primary surpluses – which are to remain 3.5 pct until 2022 – as difficult and noted that the negotiations was still within set targets, since the government had been working toward a solution on May 22 or June 15 at the latest.

In the event that the IMF and Berlin cannot reach agreement, then the IMF must immediately withdraw from the Greek programme, the spokesman stressed. “We have said many times that the German ministry always comes to the negotiations with very harsh positions. We know the disagreements, the difference over the debt that has dogged us since the start of the crisis. However, contracts must be honoured and
since Mr. Schaeuble likes this, it must be binding for him as well,” Tzanakopoulos said.

On the remaining prior actions that have yet to be implemented, Tzanakopoulos said that 104 out of a
total 140 were fully completed and another 15 were implemented on Monday.

“There are some other prior actions that require more time in order to be completed but these do not jeopardise the next installment or the programme. Time is needed until the end of the month for those to be completed as well,” he said.

On the inclusion of Greek bonds in the ECB quantitative easing programme, Tzanakopoulos said the ECB will have time to make this decision once the debt issue was concluded and this would help establish a climate of confidence in the Greek economy.