Greece Must Improve Pension Bid to Win Debt Ease, Moscovici Says

Climate Very Constructive in Greece Talks: Moscovici
  • Teams poised to travel to Athens to start program review
  • Moscovici to speak with Tsipras, IMF's Lagarde while in Davos

Greece must improve its pension proposals in order to move ahead with its bailout program and start discussions on easing its debt burden, European Union Economic Affairs Commissioner Pierre Moscovici said.

Greek Prime Minister Alexis Tsipras needs to offer “more precise parameters” on his nation’s plan to overhaul the pension system, Moscovici said in an interview at the World Economic Forum in Davos, Switzerland. So far, Greece has a “comprehensive and positive” first draft that needs to be fleshed out, he said.

“We need first to have that pension reform -- I want that to happen as fast as possible,” Moscovici said. That would pave the way for finishing the bailout program’s first overall review and “after that, we might discuss about re-profiling of the Greek debt” by lowering the debt service burden, he said.

Pension reform has become the most contentious issue in Greece’s effort to show creditors its finances can move to a sustainable footing. Greece’s “absolute red line” is no further cuts in primary pensions, Labor and Social Security Minister George Katrougalos said on Jan. 12, making the case for a 600 million-euro ($657.5 million) plan to raise funds through mandatory contributions, which Greece’s creditors say could hurt growth.

Moscovici said he plans to meet Tsipras and International Monetary Fund Managing Director Christine Lagarde during the Davos meetings. He welcomed Greece’s renewed pledges to continue talks toward a new IMF program and said there has been a “constructive” climate around recent negotiations.

Review teams will go to Athens “very soon” once Greece has provided more information to bailout authorities, he said.

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