Reuters- The creditors of the euro zone and the International Monetary Fund (IMF) agreed to leave out their differences and present a united front for a meeting with Greece, in what marks the latest setback for the rescue program, a measure aimed at agreeing on the next steps of Athens.
The announcement was enough to drive investors back into the bond market Greek, but it remains unclear whether Athens will accept the demands. The Government is under public pressure not to accept more austerity measures.
The authorities of the euro area said on Friday that creditors would demand that Greece make further reforms by 1,800 billion euros for 2018, and another 1,800 million after. The measures will focus on broadening the base of taxes and cuts in pensions.
In Athens, a source said that this was a 1 percent of Gross Domestic Product now, and once again after 2018.
A united front would leave to the margin the differences between the two groups of creditors over the size of the primary surplus – which excludes debt payments – that Greece must achieve in 2018 and maintain thereafter.
The euro zone and the IMF also differed on the type of debt relief that Greece needs.
The differences have undermined efforts to unlock more funds for Greece in their latest rescue program. As a result, the yields of Greek bonds to two-year climbed above 10 percent, although they yielded 120 basis points to 8.8 percent after the news of the pact between the creditors.
“There is an agreement to present a united front to the greeks,” said a person in charge of the euro zone. “What comes out of there, as we will see,” he said.
Another source knowledgeable about the agreement said that the creditors believe that Greece still needs to complete between three quarters and half of the so-called priority actions before you can have the 6.100 million euros in the latest tranche of aid.
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