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Greece's international lenders to start bailout review on Monday
January 30, 2016 / 5:33 PM / 2 years ago

Greece's international lenders to start bailout review on Monday

A Greek national flag flutters atop the parliament building in Athens, Greece, October 30, 2015. REUTERS/Alkis Konstantinidis

ATHENS (Reuters) - Greece’s official lenders will start a review on Monday of what progress the country has made in implementing the economic reforms agreed under its third bailout, a necessary step towards debt relief talks, a finance ministry official said on Saturday.

Greece’s international lenders are the International Monetary Fund and the euro zone bailout fund. The reforms that Greece has to implement in exchange for loans are also reviewed by the European Central Bank and the European Commission.

“The first phase will last a few days as there will be a break at the end of next week, after which the institutions will return to conclude the negotiations,” the official said, declining to be named.

Athens is keen for a speedy completion of the review, which was expected to begin late last year, and hopes a positive outcome will help boost economic confidence and liquidity.

To secure a positive result from the review Athens needs to pass legislation on pension reforms to render its social security system viable, set up a new privatization fund and come up with measures to attain primary budget surpluses for 2016-2018.

A successful conclusion of the performance review will open the way for debt relief talks.

The head of the bailout fund, the European Stability Mechanism (ESM), has ruled out a haircut for Greece’s debt but extending debt maturities and deferring interest are options that could be used to make it more manageable.

French Finance Minister Michel Sapin told Sunday’s Kathimerini newspaper debt relief talks must start soon to help restore Greece’s financial stability.

“France’s view is that the sooner the first review is completed, the faster we will be able to tackle the issue of debt sustainability and this will be better for everyone - for Greece as well as the entire euro zone,” Sapin told the paper.

Reporting by George Georgiopoulos; Editing by Greg Mahlich

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