Brussels, 26/05/2015 (Agence Europe) - On Tuesday 26 May, the European Commission said for the umpteenth time that the sooner the discussions are finished between the Greek authorities and the institutions (European Commission, ECB and IMF) the better. Contacts were continuing on Tuesday and would continue over the next few days, said Commission spokesperson Margaritis Schinas,
Speaking in Dublin, EU Economic and Monetary Affairs Commissioner Pierre Moscovici said: “We are aware of the liquidity problems in Greece and this is why it's so important now that the negotiations that are now taking place in Brussels speed up. We want that agreement, we want it fast - we are working on it hard”, adding that progress had been made in recent weeks on various reform proposals.
The Greek media say that the idea of a very low tax on bank transactions was withdrawn on Tuesday following objections from the finance ministry.
Countries will assess progress at a meeting of the Euro Working Group at the EU Council of Ministers, the body which prepares for Eurogroup meetings of eurozone finance ministers.
Moscovici said he was aware of the fact that Greece needs to repay €300 million to the IMF on 5 June and does not yet seem to be in a position to do so.
Greek Minister of the Interior Nikos Voutsis said on Sunday: “The instalments for the IMF in June are €1.6 billion. This money will not be given. There isn't any to be given. This is a known fact”. This is not the first warning from a member of the Greek government and, like the previous warnings, it was corrected shortly afterwards by the Greek finance minister, Yanis Varoufakis. On whether the instalment would be paid, Varoufakis is cited by Reuters as saying on Tuesday: '”Of course, because there will be a deal by June 5th”.
Klaus Regling, Director General of the European Financial Stability Fund (the bailout fund for Greece), said in an interview with Bild on Tuesday that it would be dangerous to fail to repay the IMF because it would have implications for other lenders, such as the EFSF.
Agreement alone will not be enough for disbursement of the awaited funding (€7.2 billion from the IMF and EFSF and returned profits made from Greek bonds under the ECB's SMP programme). The Commission constantly points out that it is the implementation of prior actions that will make it possible for the aid to be handed over.
At present, the talks are concentrating on VAT, reform of the labour market, pensions and budget targets. Olivier Blanchard from the IMF told French newspaper Les Échos: “What is obvious is that the (Greek) pension system is often too generous and that there are still too many civil servants”. He added: “Considering that the most recent estimates mention a substantial budget deficit, we need credible measures to transform this into a surplus and maintain this surplus in the future. This is far from being the case at the moment.'
Yanis Varoufakis said that Greece had done three-quarters of the work and called on its lenders to do the remaining quarter. He said it was starting to be time for them to agree. He said the Greek government could not and would not accept a remedy that proves over five years to be more damaging than the illness. (Elodie Lamer)