WASHINGTON: Difficult discussions between the International Monetary Fund and the European Union on Greece's aid plan made headway at an informal meeting in Brussels, representatives of the two institutions said Thursday.
“Good progress has been made in the discussions," IMF spokesman Gerry Rice said at a news briefing in Washington, echoing remarks by an EU official who spoke on condition of anonymity.
Representatives of the Greece bailout held a working dinner Wednesday in Brussels to try to resolve their differences over what Athens must do to reach the budget targets set last July in exchange for 86 billion euros ($94.2 billion) in EU financial aid.
“No one will let this (IMF-EU conflict) get out of control. This will be wrapped up soon," said another EU source, also under condition of anonymity.
The IMF spokesman said Thursday that it was vital to clearly define the economic measures required — notably further pension reductions — for debt-riddled Greece to obtain its target of reaching a primary surplus of 3.5 percent of gross domestic product in two years.
“That had never been quantified nor specified," Rice said, implicitly pointing the finger at the EU.
According to the spokesman, achieving that ambitious fiscal target would be “very difficult" for the Greeks who have suffered a “very painful adjustment" since 2010 under bailout programs.
“The needed reforms would be less demanding if there was more debt relief on offer from Greece's European partners," Rice said.
One of the EU sources acknowledged there was “clearly a difference of views on which assumptions the discussion should be based."
The IMF worked with the EU on two previous bailouts for Greece since 2010 but the Washington-based lender has said it will not participate in the third rescue plan without credible reforms and an EU agreement to ease Athens's debt burden.
Completion of the first review of Greece's progress under the bailout program by the EU, European Central Bank and IMF has bogged down.
“We share the authorities' view that it should be completed as soon as possible," the IMF spokesman said.