Over in Greece bailout monitors are resuming a stalled compliance review that recently reignited fears over the country’s ability to remain in the euro. From Athens, Helena Smith reports:

Testing Athens’ compliance with agreed reforms is at the heart of the review, a review that once completed will be key to releasing the €7bn plus the country requires to honour debt repayments in July. But, so too, are differences over a raft of new reforms that creditors want Athens to adopt once its current three-year €86bn rescue programme in August 2018.

Without further pension cuts and tax hikes, the IMF does not think Greece will be able to achieve the high primary surplus of 3.5 % that eurozone lenders are demanding as of next year. The monitors, who are backed by technical teams, are keen to make enough progress so that the IMF – which has advised but not formally signed up to the bailout – finally participates in the programme.

For leading lenders such as Germany and the Netherlands, IMF oversight is key to easing concerns in an electoral year that good money is not being thrown after bad when it comes to Greece. Prime minister Alexis Tsipras believes the review can be concluded by March 20 when the eurogroup next meets. Auditors have signalled they do not wish to be in Athens for more than a week.

But it is a tight deadline that many also recognise will be a tall order. Although both sides will be working on an initial agreement reached in Brussels last week, a great deal of bargaining over the type of counter measures Athens can expect to reduce the impact of further cuts is likely to dominate the days ahead. Lenders also want to liberalise the energy and labour markets – reforms that are highly controversial for leftists in the governing Syriza party. “Our hope is that we can deal with collective bargaining and other sensitive issues after we have made enough technical progress to complete the review,” said one Syriza insider. “There is a feeling that we are being pushed a great deal but the alternative [euro exit] would be worse.”