“We have a reasonable chance of achieving agreement,” the European Union’s Economic and Monetary Affairs Commissioner said in an interview in Aix-en-Provence, France. “That really depends on Greece and whether it is able to ensure that all the milestones will be met.”
Greece is now in its seventh day of talks with a team of inspectors whose approval is needed before euro-area governments and the International Monetary Fund can release an 8.1 billion-euro ($10.4 billion euros) aid payment scheduled to be made in coming weeks. The loan, part of pledges of 240 billion euros in support from the euro area and IMF, hinges on Prime Minister Antonis Samaras meeting creditor demands for reforms, including cuts to the government’s payroll.
Rehn said that he sees the possibility of the inspectors and the Greek government reaching an accord today that can then be considered by euro area finance ministers when they meet in Brussels tomorrow.
Any talk of international creditors further easing Greece’s debt burden is “premature,” the commissioner added.
“We have decided we will return to the issue of possible extension of loan maturities or reduction of interest rates later on, once we see Greece achieve a primary budget surplus and once we see its program is on track,” he said.
Rehn also said that Portugal “scored an own-goal” with two ministerial resignations related to its economic revamp program that triggered a decline in its government bond prices.
Since then Portuguese Prime Minister Pedro Passos Coelho announced a plan that sees Paulo Portas, leader of the conservative CDS party, becoming vice premier as part of an agreement to hold the coalition government together and avoid early elections.
Portas, whose resignation as foreign minister created the crisis, will be responsible for coordinating economic policy and the relationship with the European an international authorities overseeing financial support for Portugal.
“A small crisis emerged but now the leaders” of the country are working to return to “political stability that is essential for economic stability,” Rehn said.
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