Lenders ask Greece to prepare contingency package of extra reforms

Fri Apr 22, 2016 1:44pm EDT
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By Jan Strupczewski and Francesco Guarascio

AMSTERDAM (Reuters) - International lenders asked Greece on Friday to prepare a package of additional savings measures which would be passed into law now but implemented only if needed, to make sure the country reaches agreed fiscal targets.

Once agreed, the set of contingent reforms, together with measures already under negotiation, would enable the disbursement of new loans to Athens and pave the way for debt relief.

The idea of a contingency package appears to end a long dispute between the euro zone and the International Monetary Fund over whether Greece's current reforms are enough.

"We came to the conclusion that the policy package should include a contingent package of additional measures that would be implemented only if necessary to reach the primary surplus target for 2018," the chairman of euro zone finance ministers Jeroen Dijsselbloem told a news conference in Amsterdam after the ministers met.

The contingency measures needed to be "credible, legislated up-front, automatic and based on objective factors."

Greek Finance Minister Euclid Tsakalotos said Athens could not legislate "contingent measures" as Greek law did not allow it.

But Dijsselbloem said a way would be found.

"We need to work on how that mechanism is going to look like. Of course if there are legal constraints we can't and won't break legal constraints. We will design it in a way that delivers credibility ...and (is) legally possible," Dijsselbloem told a news conference.   Continued...

A rainbow is seen behind European flags during a euro zone EU leaders emergency summit on the situation in Greece at the European Council headquarters in Brussels, Belgium, July 7, 2015. REUTERS/Eric Vidal/Files