Lenders eye start of Greek debt relief talks at IMF meetings in mid-April

Sat Apr 2, 2016 4:13pm EDT
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By Jan Strupczewski

BRUSSELS (Reuters) - Euro zone finance ministers are likely to start discussing debt relief for Greece on the sidelines of the IMF's spring meetings in mid-April, if there is a deal by then with Athens on a reform package, euro zone officials said.

Representatives of Greece's official lenders are to resume talks with the Greek government from Monday on how to tackle non-performing loans in the banking system and pension and income tax reforms.

Negotiations on these reforms have been dragging on for months because they are politically very difficult for the left-wing government of Alexis Tsipras, elected on promises to end austerity.

Yet these measures are crucial for Greece to reach a sizeable primary surplus in 2018, when lenders hope it will be able to manage its own finances and borrow from the market at sustainable rates.

Without an agreement on the measures, Athens cannot get the next tranche of loans from the euro zone bailout fund. It needs the money to pay back 3.5 billion euros ($4 billion) to the International Monetary Fund and the European Central Bank in July.

An agreement is also a crucial condition for any debt relief talks to start and a deal on debt relief is also a condition for the IMF to participate in the bailout program for Greece.

"If the Greeks want to ...have a disbursement well before July, there needs to be agreement on policies by around mid-April - and on 12 April everybody goes to Washington, so best before that," one senior euro zone official said.

"Only then can one start discussing debt issues in earnest, and that will take some time. And then at the end everything has to come together simultaneously," the official said.   Continued...

A Greek flag flutters in the wind as tourists visit the archaeological site of the Acropolis hill in Athens, Greece July 26, 2015. REUTERS/Ronen Zvulun