Important progress for the 2nd program review made in talks with Greece, institutions say

Teams from the European Commission, the European Central Bank (ECB) and the European Stability Mechanism (ESM) held policy discussions with the Greek authorities for the second program review, the institutions said in a joint statement on Thursday.

The International Monetary Fund (IMF) was part of the discussion in the context of the negotiations of its own program.

“Important progress has been made on a balanced fiscal package for the post-program period and a number of key reforms, notably in the financial sector. Follow up meetings have been scheduled for the next week in advance of the Eurogroup on March 20. The aim is to rapidly conclude a staff-level agreement,” the institutions said.

Also, a significant progress has been made in talks between Greece and the institutions for “a balanced fiscal package” that will follow the current program and in structural reforms, a government official said on Thursday after the end of the last meeting with the mission chiefs, who are leaving Athens.

Talks will continue next week through teleconferences either at a technical or ministerial level to resolve issues “that need more work, possibly also a political discussion”, he added, noting the aim is to achieve bigger progress at the Eurogroup on March 20.

According to the official, the three main issues that remain open are the size of the package of measures for 2019 onwards, labour reforms and some of the countermeasures proposed by the government (for example a larger reduction of the ENFIA unified property tax).

The same official said the fiscal gap in 2018 is “insignificant […], doesn’t create any problems and has been covered by the structural measures agreed in the past.” Another open technical issue concerns the energy sector and the European Commission’s Competition arm, which will be resolved, he said.