EU Officials Head to Greece as Crisis Talks With IMF Stall

BRUSSELS (AFP) – Top EU economic affairs official Pierre Moscovici heads to Athens for talks with Greek Prime Minister Alexis Tsipras on Wednesday in an effort to unblock bailout negotiations.

Months of failed talks between Athens and its eurozone and IMF creditors have alarmed markets and raised fears of a new debt crisis that could again jeopardise Greece’s place in the euro.

“Intensive meetings are taking place and I will myself visit Athens on Wednesday,” Moscovici told reporters in Brussels on Monday.

The former French finance minister said he would meet with Tsipras as well as Finance Minister Euclid Tsakalotos during the visit.

Moscovici, who is considered an ally of the Greek government, said that all sides should avoid any needless instability, calling Greece a potential “success story”.

“We cannot, just like that, bring a crisis to the recovery in Greece amid global uncertainty,” he said.

Tsipras on Saturday warned that the International Monetary Fund, as well as hardline Germany, should “stop playing with fire”.

Talks on Friday between Athens and its creditors failed to end the stalemate, though Eurogroup head Jeroen Dijsselbloem said substantial progress had been made.

The Greek government faces debt repayments of 7.0 billion euros ($7.44 billion) this summer that it cannot afford without completing the current review of its bailout and unblocking new loans from the country’s 86 billion euro bailout.

The central focus of the row is whether Greece can deliver on budget targets that the International Monetary Fund says are based on overly-optimistic economic forecasts.

The IMF, quietly backed by Germany, insists that more pension cuts and tax hikes are necessary to reach those targets, which the Tsipras government bitterly refuses.

The fund has also made a call for substantial debt relief for Greece, which is a political non-starter in Germany, complicating matters even further.

Moscovici on Monday confirmed the EU’s positive view of the Greek economy, predicting that it would grow at a healthy clip of 2.7 percent this year.

The next meeting of eurozone ministers on February 20 is seen as an unofficial deadline to resolve all the various issues. Fears are that a series of knife-edge elections in Europe, beginning in the Netherlands on March 15, will dangerously delay a resolution.