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Extension of bailout... how long?

A meeting between the Prime Minister Antonis Samaras and Deputy Prime Minister Evangelos Venizelos to discuss the latest developments in the country’s ongoing negotiation with the troika has concluded.

Following the meeting, the Deputy Prime Minister Evangelos Venizelos told reporters that, “The European programme is ending on the 31st of December but for technical reasons it may be extended,” adding that the IMF would remain in the country given that it has its own bailout programme which is scheduled to last until 2016. He said that is up at ‘Athens’s discretion’ whether it will draw on the IMF’s bailout funds.

The position appears to be a moderate climb-down on the part of the government which only weeks ago was pushing for an early departure of the IMF from Greece at the end of this year.

The Deputy Prime Minister also stated that Greece will not need a new bailout loan and that there is no fiscal gap, characterizing discussions about it as ‘theoretical’. The troika argues that Greece will fall short of its 2015 primary surplus target by 2.5 billion euros and is demanding additional taxes and pension and wage cuts. The government maintains that no such shortfall will arise from its 2015 budget, which is currently being debated in parliament.

Venizelos attempted to sound upbeat about the recent negotiations in Paris saying they were, “a step towards the completion of the final negotiation,” and the “difficult ongoing negotiations.” He stressed that the, “basic priority is that the Greek citizen is not burdened.”

“What is needed is calm and unity. All those who create instability affect the negotiating power of the country negatively,” the Deputy Prime Minister stated, adding that the government, “remains faithful to its commitments over wages and pensions.”

“Whoever thinks that things are easy are mistaken,” he concluded.    

Also present during the meeting was the Finance Minister Gikas Hardouvelis who also stated that some progress had been made in Paris.

Hardouvelis also told reporters that the current bailout program may be extended ‘for technical reasons.’

A possible scenario is for the deadline for the conclusion of the final review of the European bailout programme to be extended into early 2015.