EU financial affairs chief in Athens as bailout talks drag

EU financial affairs chief in Athens as bailout talks drag

ATHENS, Greece — Greeks “need to see a light at the end of the austerity tunnel,” the European Union’s financial affairs chief said Wednesday during a visit to discuss the bailout-dependent country’s slow-moving negotiations with its international creditors.

Pierre Moscovici said efforts to reach a compromise would continue in coming days, as he met with Greek Prime Minister Alexis Tsipras. He said he was “hopeful” about Greece’s prospects, and noted that the country’s economy had grown modestly recently.

Tsipras’ left-led government hopes to conclude by Monday, when eurozone finance ministers will meet, the much-delayed negotiations on spending cuts and reforms demanded by European creditors and the International Monetary Fund. Without a deal, it can’t get the next batch of rescue loans and it faces a debt repayment hump in July.

Moscovici told Tsipras he believed efforts were required “from all sides” to reach an agreement, but that he was optimistic.

“We are going to discuss on and on until Monday … to bring everyone on board, and so that everybody feels comfortable with the parameters of what could be a compromise,” he told journalists after the meeting.

“We are closer than yesterday but we will be closer tomorrow and the day after, and the day after.”

An agreement between Greece and its creditors would not only free up new rescue loans but make the country eligible for the European Central Bank’s bond-buying stimulus program. That would lower Greece’s government borrowing rates and ease its way to tapping bond markets again later this year.

But Athens refuses to introduce new austerity measures. And in a sign of the difficulty of the talks, Jeroen Dijsselbloem, the eurozone’s top official, said this week that Monday’s meeting will not provide a full breakthrough in the talks because more negotiations on reforms are needed.

Greece has depended on international bailouts since 2010. In return for billions of euros in rescue loans, successive governments have had to overhaul the country’s economy, imposing repeated tax hikes and slashing spending, including salaries and pensions. The crisis has wiped more than a quarter off the Greek economy, and left unemployment hovering at 23 per cent.

The Associated Press

Canadian Press