The government, with half an eye on a snap election, is determined not to accede to prolonged austerity without the trade-off of significant debt relief. Timing is all. The coalition partners are faring badly in opinion polls but do not face high-interest debt repayments before mid-2017, allowing them to prolong negotiations while they try to improve their political position.
The government and Greece’s creditors are deeply divided over how long primary surpluses must be maintained and how to use them.
Greece has been given limited short-term debt relief through adjustments to repayment conditions.
There are no commitments regarding medium- or long-term measures and no haircut on the country’s mountainous aggregate debt.
The IMF will rejoin the bailout once there is a staff-level agreement but insists that the numbers must add up.
