World Economy

Berlin Eyes IMF Compromise Over Greek Debt

Berlin Eyes IMF Compromise Over Greek Debt  Berlin Eyes IMF Compromise Over Greek Debt

German Finance Minister Wolfgang Schaeuble is eyeing a compromise with the International Monetary Fund over Greek debt relief ahead of federal elections in September, Die Welt newspaper reported over the weekend.

According to the report, Schaeuble has asked ministry officials to outline a possible agreement with the Washington-based fund on Greek debt restructuring, news outlets reported.

 “The Germans would be willing to back down on the following IMF demand: For the government to provide a detailed document on the measures for debt relief,” the report said.

In a separate report over the weekend, Schaeuble was quoted as saying that Greece has made strong progress towards introducing reforms that could lead to the imminent release of further financial aid.

“If the Greek government upholds all the agreements, European finance ministers could complete the review on May 22 and then soon after that release the next tranche,” Schaeuble told the Funke media group newspapers.

Greece and its international creditors reached a preliminary agreement at a Eurogroup meeting last month to set up the next transfer of some €7 billion ($7.63 billion) in financial assistance. But the finance ministers will not release the tranche until the audit is completed.

Meanwhile, Greek Prime Minister Alexis Tsipras on Saturday said his government was “on target” for a May 22 fiscal deal with its creditors to enable the country to meet July loan payments, AFP reported.

“I think the general picture is that we are on target to have a conclusion on May 22,” Tsipras said in Brussels, referring to a scheduled meeting of eurozone finance ministers needed to approve the deal.

Greece’s creditors—the European Commission, European Central Bank and the International Monetary Fund—on Tuesday resumed a long-delayed audit that is required for any agreement.

Disputes remain on reforms including labor rights and the breakup of Greek near-monopoly electricity provider PPC—both thorny issues for Tsipras’ government.

Government spokesman Dimitris Tzanakopoulos has said that if there is agreement, the reforms can be approved by the parliament by May 15.

Under pressure from its creditors, Athens earlier this month accepted to reduce pensions in 2019 and lower tax breaks in 2020. These measures are worth around €3.6 billion ($3.8 billion).

However, Tsipras has said he will not apply these cuts without a clear pledge later this month on debt-easing measures for Greece.

Athens also hopes to be finally allowed access to the ECB’s asset-purchase program, known as quantitative easing to help its return to bond markets.

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