Greek finance minister: tough negotiations continue with creditors, but no reason for concern

ATHENS, Greece – Greece’s finance minister said Friday that the country was still in talks with international creditors over the course of its economic reforms, but insisted there was no cause for concern and that the government was not being pressed to impose more austerity.

Representatives of the International Monetary Fund, European Central Bank and European Commission, collectively known as the troika, visit Athens regularly to check on the progress of reforms and to release funds from a multi-billion package of loans, upon which Greece has depended since 2010.

The troika’s most recent visit has been delayed for several weeks, reportedly over differences concerning the implementation of cost-cutting measures. Their approval is needed for Greece to be given a 2.6 billion-euro installment of rescue loans that had been originally due in December.

“It is a continuing and tough negotiation,” Yannis Stournaras said after meeting with the prime minister, but added that this was expected as Greece was nearing the end of its bailout program. “There is no reason for concern.”

He said the troika was not asking the government to take new austerity measures.

For the past four years, Greece has been relying on billions of euros (dollars) of rescue loans from other European countries and the IMF after years of fiscal mismanagement left it with a mountain of debt and gaping budget deficit. In return, successive governments have had to slash salaries and pensions, raise taxes and sell off assets to reduce debt and make the economy competitive.

The country is still struggling through a six-year recession, while unemployment has risen steadily and is about 27 per cent.

In Brussels, a senior EU official said the discussion with Greece were ongoing, and that there were no travel plans for the troika’s return to Athens yet.

The official insisted Greece was not facing a cash crunch, as it is running a primary budget surplus — a surplus without taking into account interest payments on outstanding debt — and has no bond redemptions due until May.

“There is no perceptible market pressure that would lead us to say that we have to finalize it now,” he said.

Another official in Brussels, a diplomat from a major eurozone economy, said the finance ministers don’t expect to have the troika review conclusions before the end of February.

The two officials spoke only upon condition of anonymity because the talks were ongoing


Juergen Baetz contributed from Brussels.