Greece and its European creditors agreed Monday to resume talks on what economic reforms the country must make next in order to get the money it needs to avoid bankruptcy and a potential exit from the euro this summer.

The creditors also hinted that they would temper their demands for budget cuts -- a welcome thought for austerity-weary Greeks who have seen poverty and unemployment spike as their economy shrank by a quarter over the recent crisis-ridden years.

"There will be a change in the policy mix, if you will, moving perhaps away from austerity and putting more emphasis on deep reforms," said Jeroen Dijsselbloem, the eurozone's top official.


Still, there are other potential hurdles to be cleared before the IMF does get involved. One key issue relates to Greece's debt profile over the coming decades. The IMF forecasts Greece's debt will, as things stand, swell to a staggering 275 percent by 2060 from around 180 percent now.

As a result, it's urging the Europeans to come up with a substantive package of debt relief measures. The eurozone countries, notably Germany, have ruled out an outright debt reduction but are open to other kinds of debt relief, such as extending Greece's repayment periods or capping the interest rates at relatively low levels. Debt relief discussions will recommence once agreement on the next batch of Greek reforms is concluded.

Comments: Be the first to add a comment

add a comment | go to forum thread