By Lefteris Papadimas and Deepa Babington
ATHENS (Reuters) - Greece expects an interim period of up to a year of limited EU/IMF supervision when it quits its bailout programme at the end of the year, without the current "micro-management" by lenders, the finance minister told Reuters on Wednesday.
The comments by Gikas Hardouvelis in his office overlooking Syntagma square were the first time Athens has spelled out its expectations for the post-bailout era starting next year, including the sensitive issue of foreign supervision.
Faced with snap elections if it loses a key presidential vote next year, the Greek government has staked its survival on exiting the austerity-laden bailout programme a year early.
But the plan has drawn scepticism from European officials and rattled markets, which have responded by sending Greek 10 year bond yields to an unsustainable level of over 8 percent.
That has not changed Athens' plans, Hardouvelis said. Greece is discussing a safety net in the form of a credit line that it can access during the interim period, which will last from a minimum of six to a maximum of 12 months and feature much lighter supervision than in the past, he said.
"Greece will continue to have the support of the European partners. They may not be co-drivers in the car but they are safe in the back seat and you have a buffer in case something negative happens that you can draw on," said Hardouvelis, adding that the bailout exit plans would be discussed on Thursday at a meeting of euro zone ministers in Brussels.
That buffer will resemble the "enhanced conditions credit line" euro zone members are eligible for from the euro zone's bailout fund, the European Stability Mechanism, but without the bailout conditions that Greeks are used to, he said. Athens would like to use the over 11 billion euros leftover in the country's bank bailout fund for the credit line, he said.
Specifically, Greece expects to be evaluated on a much smaller number of structural reforms -- about 10 to 15 -- during this period, he said. By comparison, Athens had been expected to comply with about 800 individual measures since April, he said.
"So the micro-management will be gone in the sense that there will be simply few items to focus on," said Hardouvelis, an economist who became finance minister in June. "We expect that the auditing is not going to be as official, and it should not generate the hoopla it generated during these four years."
INSPECTORS CALL
Inspectors from the EU and the IMF have regularly visited Athens since a near-bankrupt Greece was first bailed out in 2010. The visits are deeply unpopular in the country, with unions often calling strikes and protests that turn violent, while retailers complain the inspections trigger a climate of fear that dampens consumer spending. The IMF, in particular, is widely hated among Greeks for its insistence on austerity.
Athens, however, expects the IMF to continue to have a role in the interim period, Hardouvelis said.
"We would like the IMF to be involved in the sense of giving confidence to the market that they are watching us a little bit," Hardouvelis said. "The exact IMF relationship is something that is under discussion. In our view, we would like the EU to have the upper hand on this."
Hardouvelis said he expected bond yields -- currently over 8 percent for Greek 10-year debt -- to fall once Athens clinches a deal with its partners on the post-bailout era. Greece returned to bond markets earlier this year after a four-year hiatus, but plans to fund itself have become tougher as yields climbed over the past month alongside a broader euro zone selloff.
"What will make a difference is if we finally fix the deal, we fix the day after. Fixing the day after implies that you are giving to the market a sense of where Greece goes," he said.
"Most likely we would like to enter the market after we close the deal, because once you close the deal, we expect the spreads to go down. So it makes sense for us to enter afterwards."
He declined to specify Greece's funding needs for 2015 but said they were "not very large" and manageable. Hardouvelis also dismissed speculation that the current, and final, bailout review Athens is undergoing could be delayed.
EU and IMF inspectors have yet to return to Athens since pausing the review in September, leaving just weeks for a deal to be sealed before the targeted date of Dec. 8, when a crucial meeting of euro zone finance ministers will be held.
"This review is different from previous reviews because we know that we have to finish quickly. There was no deadline on the earlier ones," he said, adding that once the review was over the issue of further debt relief could begin.
(Editing by Giles Elgood) 2014-11-05T151936Z_1
By Lefteris Papadimas and Deepa Babington
ATHENS (Reuters) - Greece expects an interim period of up to a year of limited EU/IMF supervision when it quits its bailout programme at the end of the year, without the current "micro-management" by lenders, the finance minister told Reuters on Wednesday.
The comments by Gikas Hardouvelis in his office overlooking Syntagma square were the first time Athens has spelled out its expectations for the post-bailout era starting next year, including the sensitive issue of foreign supervision.
Faced with snap elections if it loses a key presidential vote next year, the Greek government has staked its survival on exiting the austerity-laden bailout programme a year early.
But the plan has drawn scepticism from European officials and rattled markets, which have responded by sending Greek 10 year bond yields to an unsustainable level of over 8 percent.
That has not changed Athens' plans, Hardouvelis said. Greece is discussing a safety net in the form of a credit line that it can access during the interim period, which will last from a minimum of six to a maximum of 12 months and feature much lighter supervision than in the past, he said.
"Greece will continue to have the support of the European partners. They may not be co-drivers in the car but they are safe in the back seat and you have a buffer in case something negative happens that you can draw on," said Hardouvelis, adding that the bailout exit plans would be discussed on Thursday at a meeting of euro zone ministers in Brussels.
That buffer will resemble the "enhanced conditions credit line" euro zone members are eligible for from the euro zone's bailout fund, the European Stability Mechanism, but without the bailout conditions that Greeks are used to, he said. Athens would like to use the over 11 billion euros leftover in the country's bank bailout fund for the credit line, he said.
Specifically, Greece expects to be evaluated on a much smaller number of structural reforms -- about 10 to 15 -- during this period, he said. By comparison, Athens had been expected to comply with about 800 individual measures since April, he said.
"So the micro-management will be gone in the sense that there will be simply few items to focus on," said Hardouvelis, an economist who became finance minister in June. "We expect that the auditing is not going to be as official, and it should not generate the hoopla it generated during these four years."
INSPECTORS CALL
Inspectors from the EU and the IMF have regularly visited Athens since a near-bankrupt Greece was first bailed out in 2010. The visits are deeply unpopular in the country, with unions often calling strikes and protests that turn violent, while retailers complain the inspections trigger a climate of fear that dampens consumer spending. The IMF, in particular, is widely hated among Greeks for its insistence on austerity.
Athens, however, expects the IMF to continue to have a role in the interim period, Hardouvelis said.
"We would like the IMF to be involved in the sense of giving confidence to the market that they are watching us a little bit," Hardouvelis said. "The exact IMF relationship is something that is under discussion. In our view, we would like the EU to have the upper hand on this."
Hardouvelis said he expected bond yields -- currently over 8 percent for Greek 10-year debt -- to fall once Athens clinches a deal with its partners on the post-bailout era. Greece returned to bond markets earlier this year after a four-year hiatus, but plans to fund itself have become tougher as yields climbed over the past month alongside a broader euro zone selloff.
"What will make a difference is if we finally fix the deal, we fix the day after. Fixing the day after implies that you are giving to the market a sense of where Greece goes," he said.
"Most likely we would like to enter the market after we close the deal, because once you close the deal, we expect the spreads to go down. So it makes sense for us to enter afterwards."
He declined to specify Greece's funding needs for 2015 but said they were "not very large" and manageable. Hardouvelis also dismissed speculation that the current, and final, bailout review Athens is undergoing could be delayed.
EU and IMF inspectors have yet to return to Athens since pausing the review in September, leaving just weeks for a deal to be sealed before the targeted date of Dec. 8, when a crucial meeting of euro zone finance ministers will be held.
"This review is different from previous reviews because we know that we have to finish quickly. There was no deadline on the earlier ones," he said, adding that once the review was over the issue of further debt relief could begin.
(Editing by Giles Elgood)