Moral, Political, Legal Duty To Meet Obligations Lies With The Lenders , Says Greece

Greece said that foreign creditors had a “moral, political and legal” duty to meet their obligations toward it and that the country and its government has done its part on reforms, the government said on Tuesday.

Greece’s lenders aim to reach a deal at their next meeting in June after an eight-hour meeting in Brussels on Monday, the lenders failed to agree on debt relief for the crisis-hit nation.

Athens needs to repay 7.3 billion euros in loans maturing in July but the lenders did not come to an agreement on releasing new funds that Greece needs.

“Greece has met its obligations. Now it’s our partners and lenders who have a moral, political and legal duty to meet theirs,” spokesman for the Greek government Dimitris Tzanakopoulos told reporters after the meeting.

While not specifying how they intended to achieve it, lenders for Greece had agreed in principle in 2016 to consider debt relief.

Athens also needs to pass a set of laws to make the reforms stick before the funds are unlocked even while Greek lawmakers approved a series of tax rises and pension cuts last week.

Even though Tzanakopoulos said the disbursement of funds and the question of the IMF’s participation in the program were not connected, another factor holding up the loans is disagreement between the euro zone and the IMF on debt relief for Greece.

Until the IMF joins Greece’s third bailout, new loans are not desired to be released by Germany and other euro zone governments.

What kind of debt relief will be offer to the country when the bailout – worth up to 86 billion euros – ends in 2018, is the only questions that the IMF is asking of the EU and this world financial body has said that it can only join the debt relief program if it gets more clarity from the euro zone on this issue.

A significant figure that the IMF sees as unsustainably high is the debt levels for Greece which has been pushed up to 179 percent of national output due to the financial aid that the country has received since its crisis began in 2010.

“The main difference between the IMF and the German finance ministry has to do with the growth projections and primary surpluses after 2023,” Tzanakopoulos said.

On medium-term debt relief measures, Greece would exhaust all efforts for a clear solution, Tzanakopoulos said.

“We believe that in the coming weeks we will have the opportunity to work hard toward covering those gaps and reaching a desirable solution,” he said.

(Adapted from Reuters)

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Categories: Economy & Finance, Geopolitics, Strategy, Sustainability, Uncategorized

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