Greece: a bumpy road to salvation

The first review of the third Greek bailout programme for €86bn started at the beginning of February 2016 in Athens. Negotiations between the Greek government and Greece’s international creditors (represented by the so-called 'Quadriga', the IMF, the European Commission, the ECB and the ESM) should lay the groundwork for an agreement at staff level, which should then open the way for debt relief negotiations.

Negotiations for the completion of the first review of the third bailout programme for Greece are approaching a critical stage in February 2016, with the Greek government resisting some pension and tax changes, while creditors insist on credible and rigorous implementation.

Lorenzo Codogno writes that differences are bridgeable within a couple of months, and a positive outcome would open the door for debt relief. However, there are risks related to the evolving political situation, the lack of ownership by the Syriza government, the still-large fiscal gap to be delivered, potential additional social unrest, the expected impact of fiscal measures on the economy and the outlook for potential growth over the medium term.

• Primary Source

ESO: Background information: Pension reform spark fiercest protests since Tsipras took office http://www.europeansources.info/record/pension-reform-spark-fiercest-protests-since-tsipras-took-office/

ESO: Background information: ESM head rules out haircut for Greek debt http://www.europeansources.info/record/esm-head-rules-out-haircut-for-greek-debt/

ESO: Background information: The Greek debt crisis: Key sources http://www.europeansources.info/record/the-greek-debt-crisis-key-sources/

ESM: Financial Assistance: The ESM Programme for Greece http://www.esm.europa.eu/assistance/Greece/index.htm

IMF: IMF and Greece http://www.imf.org/external/country/grc/

European Commission: DG Economic and Financial Affairs: Financial assistance to EU Member States: Greece http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/index_en.htm

Kathimerini, 10.02.16: Bank of Greece governor Stournaras urges completion of bailout review http://www.ekathimerini.com/205839/article/ekathimerini/business/bank-of-greece-governor-stournaras-urges-completion-of-bailout-review

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