Wolfgang Schaeuble plays down debt relief in Greece talks

Greece said it’s aiming for an agreement with creditors on the next tranche of emergency loans by the beginning of May as German Finance Minister Wolfgang Schaeuble sought to play down debt relief expectations.

“We have almost identical estimates with the European Commission,” Minister of State Nikos Pappas, who is Prime Minister Alexis Tsipras’s closest ally in the government, said in Athens.

Bailout auditors from the EU, the ECB, and IMF have been holding another round of talks with government officials in Athens for the past week to discuss policy measures attached to the country’s bailout.

The biggest area of contention is the management of bad loans burdening bank balance sheets, Mr Pappas said, with their positions closer on a pension system overhaul and income tax reform.

Greece and international lenders made progress in talks on the Greek reforms, the Commission said yesterday.

It also said that eurozone government lenders bailout fund, stuck to their demand that Greece must reach a primary surplus of 3.5% of its GDP in 2018.

The IMF has suggested a lower primary surplus in 2018 would have been more realistic and could work if the eurozone offered Greece more debt relief.

“We’ll find a solution in the coming weeks,” Mr Schaeuble said over the weekend.

This solution “has nothing to do with debt forgiveness, but with the fact that Greece needs to do more” to return to a competitive economy, he said.