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02 December 2013

Kathimerini: Barnier calls on Greeks to continue their streamlining efforts; Troika visit postponed


Barnier called on Greeks – mainly the country's government – to make sure they do not reduce their efforts for fiscal adjustment and reforms, adding that a debt haircut was not the issue at present. Moody's upgraded Greece's credit rating by two notches.

In response to a question at about lightening the Greek debt, the French official said it was not a timely question, adding that “the priority today is to achieve the streamlining and adjustment and for the 2014 programme to be successful. It is therefore important that you do not relax your efforts.”

However, he did note the progress Greece has achieved and referred specifically to the primary surplus recorded as well as the promotion of reforms, while also citing the stabilisation of the credit sector. “I am deeply confident that Greece is in the right direction", Barnier stated.

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It was confirmed on Friday (29 November) that the troika would not be returning to Athens this week. The possibility of a deal between the two sides being reached before the December 9 Eurogroup has been ruled out. "Discussions are continuing on a set of policies that could form the basis for a successful conclusion of the ongoing review of the Greek economic adjustment programme”, said Simon O’Connor, a spokesman for European Economic and Monetary Affairs Commissioner Olli Rehn, on Saturday.

“Progress is being made but there remain a number of open issues which require further work. Close and constructive contacts with the Greek authorities are continuing in this context from headquarters. Staff teams will return to Athens in due course but this is not expected to be before the Eurogroup of 9 December."

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Meanwhile, Moody’s upgraded Greece’s credit rating two notches late on Friday and has maintained its stable outlook for the Greek economy, which means it does not consider a downgrade likely in the near future. However it does expect the recession to continue in 2014.

The international rating agency lifted Greece from C to Caa3 – still in junk territory though – after the close of the New York Stock Exchange, citing the improvement of the country’s economic prospects in recent months. The better macro-economic figures with a smaller economic contraction than expected and this year’s anticipated primary surplus contributed to the firm’s decision.

Still, Moody’s predicts the economic contraction will continue for a seventh year in 2014, with the economy shrinking 0.5 per cent against a government forecast for a 0.6 per cent recovery. Moody’s says the economy will rebound by 1 per cent in 2015, led by exports and tourism.

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© Kathimerini


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