Optimism in Athens dampened by possibility of delay in debt talks

The government is concerned that discussions on Greece’s debt could be put off until September despite pledges by European officials at the last Eurogroup meeting to consider the matter in due course, Kathimerini understands.

Despite the jubilatory tone of the statements issued by the Greek government after Monday’s Eurogroup, the mood in the government’s camp is distinctly more anxious, sources indicated on Wednesday. Although eurozone finance ministers may touch on the issue of debt relief at the next Eurogroup on May 24, the key focus of that meeting will be to determine whether Greece has made good on legislating outstanding reforms, namely the creation of a privatization fund, new rules regarding the management of nonperforming loans held by Greek banks and a series of “indirect” taxes on coffee, fuel and Internet connections.

In view of this, decisions on the launch of debt talks might be put off until after summer.

Although there is concern about a possible delay in debt talks, government officials were buoyed on Wednesday by the revelation, through an article in Germany’s Die Welt, that European Stability Mechanism chief Klaus Regling is proposing that the ESM buy a portion of Greece’s debt to the International Monetary Fund to make a restructuring of Greece’s debt more manageable for eurozone member-states. If such a proposal materializes, sources close to Prime Minister Alexis Tsipras indicated it could provide a welcome political boost to the premier, who will have managed to reduce the Fund’s role in the Greek program. Although the IMF has been consistently pushing for Greek debt relief, successive governments have resented its insistence on painful structural reforms.

A session of the Euro Working Group on Thursday is unlikely to touch on Greece’s debt problem, focusing rather on a new round of reforms that Greece must legislate: the package including new rules for NPLs and indirect taxes. That discussion is likely to continue into next week, when government officials will start drafting another bill, bundling together the outstanding reforms ahead of a vote that will be held in Greece’s Parliament before the May 24 Eurogroup. The vote is widely expected to pass into law though some resistance to the additional taxes is expected, particularly from members of leftist SYRIZA’s radical Group of 53 faction.

Tsipras’s office on Wednesday released a statement lashing out at main conservative opposition New Democracy, which it accused of “betting on the failure of the negotiations and the country, and losing.” After the positive Eurogroup statement on Greece last Monday, ND is “scrambling to back-pedal on its earlier calls for general elections,” a government source said.