Eucl. Tsakalotos and C. Lagarde discussed creditors’ proposal which illustrates contingency-measures

Greek Finance Minister Euclid Tsakalotos and IMF Managing Director Christine Lagarde discussed on Saturday night the creditors’ proposal which illustrates contingency-measures that Athens will have to adopt in case it does not make its fiscal goals, as presented at the Washington Club.

Euclid Tsakalotos met late on Saturday night for the second time in 24 hours with Christine Lagarde, after a request by the Finance Minister. After Tsakalotos canceled his scheduled press conference with Greek correspondents, he had a 20-minute meeting with Lagarde at the IMF base, and was informed on the discussions that took place at the Washington Club last Friday, where a common proposal was made for additional emergency measures.

The meeting took place after a piece by the Wall Street Journal was released, which mentioned that Greece’s creditors’ are leaning towards a proposal request from the Greek government for emergency measures that will be activated in case Greece does not make the program’s goals.

More precisely WSJ’s piece says “Greece’s creditors are considering seeking extra austerity measures that would be triggered if Athens misses its fiscal targets, in a bid to bridge differences between Europe and the International Monetary Fund and break a deadlock threatening to unravel the Greek bailout.”

The piece continues by saying “Under the proposal, say officials involved in the discussions, Greece would have to sign up for so-called contingency measures of up to about €3 billion, on top of the package of about €5 billion in tax increases and spending cuts Greece and its lenders are already negotiating.”

However, the piece mentions that “the country would only have to implement the extra measures if it falls short of targeted budget surpluses for coming years that were set out in last year’s bailout agreement, the officials say. The idea, which has support from the eurozone’s dominant power Germany, hasn’t yet been agreed upon, and officials on the creditors’ side say it would be politically hard for Greece’s embattled government to swallow.”

In addition, the piece says that the alleged contingency-measures would bridge the gap in the monthlong disagreement between the IMF and the European institutions on Greece’s fiscal budget.

After his meeting with Christine Lagarde, Euclid Tsakalotos told the Greek correspondents that “We had a good conversation with Ms. Lagarde in order to clarify several issues. I think that we will continue the discussions with heads of the institutions on Monday and Tuesday and we are all expecting to seal the deal to proceed with the Eurogroup.

When asked if he was refuting or confirming WSJ’s article on the €3 Billion contingency measures by the IMF, Euclid Tsakalots said that “he hasn’t even read the piece, therefore he cannot refute it as he is going from meeting to meeting.”

IMF managing director Christine Lagarde said on Saturday that the IMF team will return to Athens next week to continue with the talks on the Greek debt crisis. However, the managing director warned that there might not be “immediate” outcomes.