A top European official said Tuesday that Greece and its European creditors should be able, by next week, to iron out disagreements on reforms the country must undertake to receive a new rescue-loan installment.
Financial and economic affairs commissioner Pierre Moscovici said that while significant progress has been made so far, “three or four” issues remain unresolved.
These include measures to protect Greek mortgage holders from foreclosures, as well as whether sales tax will be imposed on private education – from kindergartens and schools to music, language and dancing lessons.
But Moscovici voiced confidence that a compromise will be found ahead of Monday’s meeting of finance ministers from Greece’s eurozone partners.
“We are not considering the case of failure; we are looking only for success,” he said, after talks in Athens with Greek Finance Minister Euclid Tsakalotos.
A successful outcome would allow Greece’s creditors to unlock a 2-billion-euro ($2.4-billion) loan installment, and resume talks on further reforms on which another 1 billion euros in rescue loans is contingent. The money comes from the third bailout deal Greece signed in the summer, after months of dithering that nearly led to the country’s expulsion from the eurozone.
The next step will be to start negotiations on how to lower Greece’s debilitating debt pile, and on injecting taxpayer funds into Greece’s battered banking system – a process that must be completed by the end of this year to save depositors with over 100,000 euros in the bank from being forced to contribute to the recapitalization.
“We are all aware that further measures will have to be adopted in coming days and weeks,” Moscovici said, voicing confidence that the year-end deadline can be met.
Tsakalotos said he expects talks can start in December on cutting Greece’s huge debt load, probably through generous repayment extensions and rate cuts.
“If there is good faith on both sides, there are many technical solutions to address the issue of the debt; but if there is no good faith I can think of arguments against any solution whatsoever.”
Moscovici met Prime Minister Alexis Tsipras earlier Tuesday. On Wednesday, he is due to see Labor Minister Giorgos Katrougalos, who faces the daunting task of reforming the country’s moribund pension system. The left-led government has said it intends this month to present its final proposals, which are expected to involve a basic pension of just under 400 euros per month, augmented by a sum directly linked to workers’ contributions.
Also Tuesday, Greece signed a deal for 285 million euros in loans from the European Investment Bank, which is the EU’s long-term lending institution. The loans will be used for energy projects.