November 29, 2013 / 8:23 PM / 5 years ago

EU-IMF postpone visit to Athens in dispute over reforms

BRUSSELS/ATHENS (Reuters) - Inspectors from the EU and IMF have postponed a planned visit to Greece, officials told Reuters on Friday, a move that marks a new low in relations between the parties and could delay aid payments to Athens.

Protesters march during a rally organised by unions from the state health sector against the government's plans for cutbacks in medical staff and hospitals in Athens November 29, 2013. REUTERS/Yorgos Karahalis

The Greek government said it still expects differences with the troika to be bridged.

The decision to postpone the visit may be an attempt by the European Central Bank, European Commission and International Monetary Fund - together known as the ‘troika’ - to try to bring Athens to heel as frustration grows over Greece’s failure to complete the reforms it has promised in return for aid.

It is a potential embarrassment for the Greek government, which wants to be able to show it is hitting its targets and bouncing back before it takes over the rotating presidency of the European Union for six months from the start of next year.

The troika visits Athens regularly to check on progress on its bailout commitments and take decisions on whether to release further installments of loans, with frequent standoffs over whether Greece is meeting its obligations.

The inspectors had been due to assess Greece’s progress before the Eurogroup of euro zone finance ministers meets on December 9. That meeting will decide whether to approve the disbursement of the next tranche of aid.

“It has to be clear that there is a chance of reaching agreement with Athens about reforms before the troika goes over there,” said one official.

He and a second euro zone official said the postponement could delay the approval of the next tranche, although the announcement may also spur Athens into action.

Greece’s finance minister Yannis Stournaras said late on Friday that junior staff of the troika would return to Athens next week, as planned, and its heads would arrive after the Eurogroup meeting, aiming to complete talks by the end of the year.

“This (the postponement) isn’t troubling me,” he told reporters according to a finance ministry statement. “The troika will come after the Eurogroup with the aim to conclude (an agreement) by the end of the year.”

Greek Prime Minister Antonis Samaras said last week he wanted the review to finish before Athens assumes the Presidency.

A spokesman for the European Commission said discussions with Athens would continue. “We have not yet taken a decision on precisely when the mission will return,” he said.


While it’s possible the differences will be bridged in the coming days, Greece has no immediate funding pressures and can probably delay on reforms for a while longer.

Athens is due to receive up to 5.9 billion euros ($8 billion) of loans by the end of the year, according to the latest schedule published by its creditors.

About 1.85 billion euros of Greek bonds mature on January 11, according to Thomson Reuters data. The next big bond maturities, worth about 9.3 billion euros, are in May next year.

Stournaras said on Friday he would focus on resolving issues that would release 1 billion euros of that money, which are mainly linked to the partial or entire closure of three loss-making state companies and plans to transfer or dismiss thousands of underperforming or unneeded civil servants.

The troika’s current review has been dragging on since September and has already been interrupted twice, due to the reluctance of Greece’s fragile, austerity-weary coalition government to adopt any more unpopular measures to satisfy lenders.

Eurogroup chief Jeroen Dijsselbloem said earlier this month that some European finance ministers are “losing patience”.

By contrast, Ireland has met all its obligations and is about to emerge from its rescue program.

Athens has already obtained about 216 billion euros of its 240 billion euro bailout, meaning that about 80 percent of its debt is in the hands of the EU and the IMF.

In exchange for the loans, it is near balancing its budget, taking measures that have induced a six-year recession and a record unemployment rate of more than 27 percent.

The Greek parliament is due to vote its 2014 budget on December 7. Lenders said this month that unless it found new savings, Athens would miss its surplus target by about 2 billion euros. But Stournaras said this week that the difference had narrowed to about 1 billion.

The chances are that if that gap can be narrowed in the coming days, the troika will immediately reschedule its visit.

Apart from the 2014 budget, Greece and its lenders still have to agree on an updated fiscal strategy for 2014-2017 and a new version of an unpopular property tax.

The troika is also pushing Greece to soften restrictions on large-scale corporate firings, as well as on bank foreclosures of first homes. Many government lawmakers have vowed to block or water down these reforms.

($1 = 0.7345 euros)

Editing by Ruth Pitchford

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