March 3, 2017 / 1:16 PM / 3 years ago

France sees political compromise soon in Greek bailout talks

ATHENS (Reuters) - Greece and its international lenders have the political will to reach a compromise and conclude a crucial review of the country’s bailout progress soon, French Prime Minister Bernard Cazeneuve said on Friday during a visit to Athens.

French Prime Minister Bernard Cazeneuve (L) meets with his Greek counterpart Alexis Tsipras at the Maximos Mansion in Athens, Greece March 3, 2017. REUTERS/Michalis Karagiannis

The review has dragged on for months, mainly due to a rift between the European Union and the International Monetary Fund over Greece’s fiscal goals next year - when the current rescue program expires - and beyond.

The uncertainty surrounding the talks has revived fears of a new financial crisis in the euro zone, just as investors’ nerves are jarred by unpredictable election races in the Netherlands, France and Europe’s paymaster Germany.

“Greece and its partners have the political will and I believe we will have positive results and good political compromises in the near future,” Cazeneuve said after meeting Prime Minister Alexis Tsipras in Athens.

“France has chosen to be on Greece’s side,” he said during the visit which is aimed at helping speed up the talks.

France helped Greece reach a vital deal with its lenders in 2015, the country’s third international bailout, which kept the crisis-hit country in the euro zone after tense negotiations. EU leaders are expected to meet in Brussels next week.

Tsipras said it was “totally feasible” to reach a preliminarily deal by March 20, when euro zone finance ministers are expected to meet again. He also said Greece sought what he called a “global solution”, which would include debt relief measures that will be implemented in the post-bailout period.

EU and IMF mission chiefs returned to Athens this week to resume the review on the country’s progress.

Under negotiation is a package of austerity measures worth 2 percent of gross domestic product, which will be legislated now but implemented in 2019, and a set of relief measures with the same fiscal value. These will be activated if Athens meets a 3.5 percent of GDP primary surplus target in 2018.

The IMF says the targets must either be lowered or the country needs to adopt more austerity measures to achieve them. The fund also argues that Greece needs further debt relief and has set these as terms for its participation in the country’s current bailout.

French Finance Minister Michel Sapin, who met his Greek counterpart Euclid Tsakalotos earlier on Friday, said the IMF’s participation was crucial as it added credibility to the country’s bailout efforts.

Reporting by Renee Maltezou, Karolina Tagaris and Lefteris Papadimas; Editing by Toby Davis

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