Greece will return to credit markets next year if the country's international creditors offer debt relief measures at a crucial May 24 meeting of euro zone finance ministers, Prime Minister Alexis Tsipras told a newspaper on Saturday. The cash-strapped country, which has been cut off from global debt markets since 2014 and agreed a third multi-billion euro bailout last July, started talks with lenders earlier this week on how to make its debts more manageable.
Tsipras's government aims to conclude a review of its progress on bailout-linked reforms at the May 24 meeting, a step that would unlock the next tranche of funds in time to meet repayments to the European Union and the International Monetary Fund (IMF) as well as state suppliers. The leftist leader, re-elected in September on promises to mitigate the impact of austerity on crisis-weary Greeks, also hopes for progress on easing its debt burden, which is set to reach 182.8 percent of gross domestic product (GDP) this year, according to European Commission forecasts.
"If we achieve what we seek for the debt on May 24, we will return to the markets in 2017," he told Realnews newspaper. "We might exit the bailout once and for all a lot before the programme expires in August 2018," Tsipras added. Greek finance Minister Euclid Tsakalotos said last year a long-term commitment to debt relief from euro zone countries was key to restoring investor confidence, and that Athens could return to bond markets by the end of 2016.
Greece's 10-year bond yields fell below 8 percent for the first time in more than six months on Tuesday after euro zone finance ministers offered debt relief to the country from 2018. They soared to almost 19 percent at the height of the country's debt crisis in mid-2015. Treasury bills are currently Greece's main source of short-term funding. European Commission Vice President Valdis Dombrovskis told the Kathimerini newspaper that Greece and its lenders were very close to concluding the review on May 24 but no deadline has been set.
Greece last week voted pension and tax reforms, part of a package agreed under its bailout. Dombrovskis said Athens now needed to legislate the remaining measures and contingency reforms which the country will not have to implement unless it falls short of its fiscal targets. Tsipras's government is expected to submit a bill on the pending reforms and secure a parliamentary approval before the Eurogroup meets to wrap up the review. The package will probably include a set of indirect tax hikes, setting up a new privatisation fund, regulations on Greek banks "bad loans" and the contingency reforms. Dombrovskis said euro zone finance ministers aimed to specify a "road map" on the debt relief measures at the May 24 meeting to secure the IMF's participation in the Greek bailout rather than finalise a full three-stage debt relief programme.