IMF representatives and EU finance ministers gathered in Brussels to reach a compromise on debt relief for Greece that could end the seven-year-old drama for the continent’s most indebted state.
The International Monetary Fund is unwilling to agree to a bailout unless the euro area ensures the country’s 315 billion-euro (USD 355 billion) debt is sustainable.
Greek lawmakers approved economic measures in the hopes of mollifying creditors, including pension cuts, tax hikes and other structural economic reforms.
A key issue of contention is the outlook for Greece’s economy after 2018, when the current bailout expires.
Meanwhile, several countries including Germany will not inject new funds until the Washington-based fund joins the program. Athens needs the new aid installment before it has to repay about 7 billion euros to lenders in July.
“The starting positions are all rather wide apart,” French Finance Minister Bruno Le Maire told reporters ahead of the meeting. “There’s a lot of work that needs to be done to bring the positions closer.”
Earlier in the day finance ministry deputies failed to resolve the outstanding issues, according to two European Union officials with knowledge of the talks, who asked not to be identified because the discussion was private.
Moreover, additional debt relief is also necessary for the European Central Bank to include Greek bonds in its asset purchases program, which would ease the country’s access to bond markets.
Greece is the first developed country that was downgraded to emerging-market status. The debt-laden state was cut after an 83 percent fall in its stock market since 2007.
Read more at Bloomberg.