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Talks between Greece and its international lenders on unlocking
a new tranche of aid have snagged over discord on whether
present cutbacks are enough for Greece to reach a primary
surplus target of 3.5 percent by 2018.
Indebted Greece, which signed up to a third bailout worth up to
86 billion euros last year, needs creditors from European Union
institutions and the International Monetary Fund to sign off on
reforms to release a bailout installment exceeding 5 billion
euros, needed to pay off maturing ECB and IMF loans in June and
July.
Reforms under discussion include changes to pensions and taxes,
and additional measures, or "contingent" measures Greece would
need to introduce in case it misses its budget targets.
The left-led government says Greek law bars it from legislating
on a hypothetical event, and has offered instead to introduce a
mechanism which would automatically trigger spending cutbacks if
budget targets are missed.
"This mechanism will be included in the legislation linked to
the (review) agreement and which Athens will need to adopt," the
official said.
Greece and its official creditors were "very close" to an
agreement on the main package of pension and tax reforms which
would be the equivalent of 3.0 percent of GDP, the official
said. Talks resumed in Greece on Monday.
(Reporting by Renee Maltezou; Editing by Alison Williams)
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