BRUSSELS -- Greece and its international creditors made progress Friday toward an agreement that will ensure the country gets the money it needs to help it avoid bankruptcy this summer, but which has the potential to draw more ire from austerity-weary Greeks.
For months, the bailout discussions have stalled amid disagreements over pension, tax and labor market policies that Greece should take in order to get the rescue money due from its most recent international rescue. Without the money, Greece would once again be facing the prospect of having to exit the eurozone, the group of nations whose common currency is the euro.
"The big blocks have now been sorted out, and that should allow us to speed up and go for the final stretch," Jeroen Dijsselbloem, president of the Eurogroup, told reporters after a meeting of the eurozone's 19 finance ministers in the Maltese capital of Valletta.
Once a broad agreement is reached in coming weeks, Dijsselbloem said, the eurozone will return to issues related to Greece's stringent, medium-term budget targets and the country's debts -- key conditions of the Greek government.
However, in return for reaching an agreement on those conditions, the Greek government will have to push through some further tough measures for the years ahead -- on top of all those enacted over the past seven years.
Though Greek Finance Minister Euclid Tsakalotos said an agreement had been reached on the basic issues that would allow bailout inspectors to return to Athens to iron out remaining issues, he warned of more hardship ahead for austerity-weary Greeks.
"There are things that will not satisfy us, and there are things that satisfy us," he said. "It is in the nature of every agreement for there to be compromises and things that will upset not generally the negotiating team but the Greek people."
Tsakalotos said further austerity measures demanded for 2019 -- after Greece's current third bailout ends next year -- will be legislated on in the next few weeks, along with Greek-proposed countermeasures to alleviate the pain. However, while the cuts are automatic, the countermeasures will only be implemented if Greece meets its fiscal targets.
The measures will include pension cuts in 2019 worth 1 percent of Greece's gross domestic product and an increase in tax revenues in 2020 worth another 1 percent through broadening the tax base.
The countermeasures, including programs to alleviate child poverty and help those most in need, will offset those -- but only if Greece meets its targets.
European Commission Vice President Valdis Dombrovskis said a deal on the latest steps to keep Greece afloat should be within reach by the time eurozone ministers meet again May 22 -- easily in time for Greece's next big debt-repayment hump in July.
Also Friday, the continuing involvment of the International Monetary Fund, which has been part of Greece's bailout programs since the first rescue in 2010, appeared evident.
In recent months, there has been an open disagreement between the IMF and the eurozone over such matters as the sustainability of Greece's debts going forward.
"There is agreement on these main topics, on these big reforms, on the size sequencing and the timing -- that is with the IMF absolutely yes," Dijsselbloem said. "I could not talk about an agreement on those issues if the IMF had not agreed."
The IMF agreed that progress has been made in recent weeks but that a number of issues still needed to be addressed.
"But we are at a point where we think there are good prospects for successfully concluding discussions on these outstanding policy issues during the next mission to Athens," said Gerry Rice, an IMF spokesman.
Without more bailout cash, Greece would struggle to make a debt payment in July, raising anew the prospect of default. The last time Greece faced potential bankruptcy was in July 2015, when Prime Minister Alexis Tsipras' government eventually agreed upon a three-year bailout worth up to $91 billion.
As part of its third international bailout agreement, Greece has to make a series of sweeping changes to its economy in return for the loans. But the talks have dragged on for months, freezing the latest loan payout and hurting the chances of a self-sustaining Greek economic recovery after years of recession and turmoil.
Tsipras' left-leaning government is pushing for a comprehensive deal that would cover more than just spending cuts and overhauls by Greece, but also alleviate the country's debt burden and pave the way for its return to international bond markets later this year.
Greece has depended on international bailouts since 2010, after it was unable to borrow on international bond markets.
To receive the money, successive governments slashed incomes, raised taxes and implemented market overhauls. Though helping to put the public finances on a surer footing, the measures came at a cost -- the Greek economy lost a quarter of its output.
Currently demanded cutbacks include new pension cuts, a broadening of the tax base, labor overhauls and privatizations. These will require approval by Greece's parliament, where Tsipras holds a three-seat majority.
Information for this article was contributed by Pan Pylas of The Associated Press.
A Section on 04/08/2017
Print Headline: Greece, creditors settle on key steps