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Greece pledges reform push as EU/IMF bailout talks in Paris end
September 4, 2014 / 3:43 PM / 3 years ago

Greece pledges reform push as EU/IMF bailout talks in Paris end

A Greek flag flutters on the top of the parliament as the moon rises in Athens May 23, 2013. REUTERS/John Kolesidis

PARIS (Reuters) - Greece pledged to step up reforms on Thursday as it wrapped up the first round of talks with its EU/IMF lenders in Paris in the latest review of its bailout.

Some European Union officials and the International Monetary Fund have warned that Athens’ reform efforts may have slowed since the anti-bailout opposition won European elections in May. Greek officials have said they would seek to assuage those concerns during the talks in Paris this week.

The two sides are set to resume discussions on the review later this month in Athens, focusing on Greece’s projected budget and financing gaps for next year and major reforms like overhauling the pension system.

A senior Greek finance ministry official said the EU/IMF team had agreed during the talks in Paris that Athens had completed at least half of previously agreed reforms due to be completed by August.

It has typically been behind schedule in completing reforms, but the pace of reforms had largely accelerated over the past year before the European elections.

“We believe we’ve done more but they cannot confirm that yet,” the official said. “We want this level to be higher by the time they come to Athens.”

Athens also put forward proposals to offer tax relief for the first time since the Greek debt crisis erupted, a Greek official said, without specifying whether the EU/IMF team had accepted the plan. Greek Prime Minister Antonis Samaras has promised Greeks gradual tax relief as the economy starts to recover from a six-year recession that has sent unemployment to a record high above 27 percent and shrunk the economy by a quarter.

Speculation on tax relief measures such as cuts to a heating oil tax, a special solidarity tax and maintaining a lower value-added tax regime has risen ahead of a major policy speech by Samaras on Saturday.

“We again had constructive discussions today,” the European Commission’s representative at the talks, Declan Costello, told reporters.

“The meetings in Paris over the last three days have been very useful for both sides to get a better understanding of some of the key issues that we have to discuss in the context of the bailout, and we look forward to taking these issues up again in Athens later on in the month.”

Bailed out twice since 2010, Greece is reliant on aid from the EU and IMF to keep afloat. But its fortunes have risen sharply this year as the threat of bankruptcy recedes and its finances get back on track.

It has returned to the bond markets twice this year after a four-year hiatus and plans a third foray later this year, in a sign of growing investor confidence in the debt-laden nation.

Still, the risk of political instability has remained, underscored by an Alco poll for the To Pontiki newspaper on Thursday, which put support for the anti-bailout Syriza party at 28.1 percent - four percentage points ahead of Prime Minister Antonis Samaras’s New Democracy conservatives and the highest in surveys by the agency over the last two years.

Reporting by Leigh Thomas and Kostis Platzos; Writing by Deepa Babington; Editing by Susan Fenton

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