The head of the eurozone has called an emergency meeting on Greece, but dismissed suggestions that the country’s bailout programme was in crisis.
Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup of finance ministers, will meet other key players in Brussels on Friday afternoon, as Greece and its EU creditors attempt to hammer out an agreement on the next stage of the country’s €86bn (£73bn) bailout.
Euclid Tsakalotos, Greece’s finance minister, is flying in from Athens, according to Greek media reported by Reuters. Pierre Moscovici, EU commissioner for economic affairs, Klaus Regling, head of the European Stability Mechanism (the EU bailout fund), and Benoît Coeuré from the European Central Bank are also reported to be taking part in the meeting.
Greece needs to agree economic reforms with its EU partners in order to unlock the next tranche of bailout funds before debt repayments due in the summer. A meeting of eurozone finance ministers on 20 February is widely seen as the last chance to reach a deal before critical elections in the Netherlands, France and Germany this year.
Dijsselbloem dismissed the idea that the bailout programme was in crisis. “The story that there’s a crisis [is] roundly exaggerated,” he said on Friday in The Hague. “The next large payment that Greece needs to make [on its debt] isn’t until this summer. But if I can give them a push today, that would be be very welcome.”
Greek borrowing costs have spiked in recent weeks, amid investor fears that Athens will struggle to unlock the next tranche of its bailout funds, because of a dispute between its EU creditors and the International Monetary Fund.
The IMF has declined to join the latest Greek bailout programme: it argues that without debt relief, the Greek economy will struggle for decades to come. The EU thinks short-term debt-relief measures already on the table make Greece’s debt burden manageable.
But several countries, including Germany and the Netherlands, want the IMF on board, because they think its participation will ensure Greek reforms are pursued rigorously, while reassuring sceptical voters.
Dijsselbloem said the talks on Friday would not be about debt relief. He wants to focus on pension reforms and the primary surplus – defined as government income exceeding spending, excluding debt repayments.
The EU wants Greece to hit a surplus on its budget of 3.5% of GDP by 2018, but the IMF – and the Greek government – argues this is unachieveable and want a lower, 1.5% target.
Greek ministers have sounded optimistic about breaking the deadlock: Europe minister George Katrougalos said a deal before 20 February was possible and could have been struck earlier, if the IMF had not been involved.