Greek Bailout Review Needs Months, Not Weeks, Dijsselbloem Says

  • Successful completion would pave the way for debt relief talks
  • Greece needs to overhaul pension system to meet conditions

The first significant review of Greece’s latest bailout program, which is likely to trigger talks on debt relief for the stricken euro-area nation, will probably take months to complete, said Jeroen Dijsselbloem, who leads the bloc’s group of finance ministers.

Only when Greece has satisfactorily implemented a series of contentious reforms, most notably changes to the country’s pension system, can the euro area contemplate moves to ease its debt burden, Djisselbloem, the Dutch finance minister, told reporters in Amsterdam on Thursday. The review’s completion should also unlock the next installment of Greece’s loan arrangement agreed last year.

“There can only be a successful completion of the first review if there is an agreement on all the open issues -- and the pension reform is the biggest one,” Dijsselbloem said. The review will need “certainly rather months than weeks,” he said.

European creditors are showing no sign of backing down in their demands for Greece to take tough economic steps before getting the billions of euros needed to pay salaries and buy goods. Greek Prime Minister Alexis Tsipras has also warned that the country’s pension system is on the “brink of collapse.”

Greece’s government is scheduled to submit legislation for the country’s pension reform to parliament between Jan. 20 and Jan. 25, the 300-seat chamber’s Speaker Nikos Voutsis told reporters in Athens on Thursday. The debate and vote on the bill is expected to be completed in the first 10 days of February.

Subject to Agreement

If the measures are passed and the government reaches agreement with the European Commission and European Central Bank, which oversee the bailout program, Greece’s debt burden will be back on the agenda of euro-area finance ministers, Dijsselbloem said.

“A positive outcome of that will lead to further disbursements, tranches for Greece, will lead to a debate on debt restructuring, debt-related measures -- but that will be the order of things,” he said.

Greek Finance Minister Euclid Tsakalotos begins a round of meetings with his euro-area counterparts on Friday to discuss the review and debt relief, his ministry said in an e-mailed statement. He is scheduled to meet Dijsselbloem in Amsterdam on Jan. 12 and German Finance Minister Wolfgang Schaeuble in Berlin the following day.

The EU Commission received the Greek draft proposal on pension reform on Monday night and the plan is being scrutinized, the commission’s spokeswoman Vanessa Mock told reporters in Brussels on Thursday.

“This is now being assessed in detail and discussions with the Greek authorities will be continued,” she said, adding that she couldn’t say when the review of the bailout program would begin.

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