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Greek finance minister Euclid Tsakalotos (centre). Photograph: Domenic Aquilina/EPA

The Greek government is hoping to make progress in its negotiations with creditors at the IMF Spring meeting this week.

The country’s finance minister, national economy minister and deputy finance minister are all flying to Washington today for crucial debt talks, including with Fund chief Christine Lagarde.

Helena Smith reports from Athens

Greek officials say the all-important issue of debt – and ways to reduce it – will be at the core of talks the finance and national economy ministers, Euclid Tskalotos and Dimitris Papadimitriou, will have in Washington.

Tsakalotos, whose first meeting will be with IMF managing director Christine Lagarde on Friday, is hoping that the framework of a debt relief deal can be secured in time for the next Eurogroup meeting of single currency finance ministers on May 22.



Athens’ leftist-led government, in a sop to sceptical MPs unnerved by the prospect of further pension cuts and tax increases - concessions made to conclude the long-stalled compliance review at the heart of the country’s latest standoff with creditors - has threatened the measures won’t be implemented if a debt relief deal isn’t cut first even if the unpopular policies aren’t due to be enforced until 2019.

Auditors representing Greece’s bailout lenders are expected to return to Athens next week to complete the technical aspects of the review before a staff level agreement is finally wrapped up. Parliament would then legislate the measures before a comprehensive deal, including medium-term debt relief measures, are put before the Eurogroup of finance minister.

But as ever nothing is quite as easy as it seems. The IMF, which only this week said it could not participate in the latest bailout programme unless Greece’s debt burden became manageable, projected the country’s primary surplus would be just 2% in 2018, well short of its target of 3.5%. That once again leaves the door wide open for renewed friction between the Fund and euro area member states not least Germany which has made IMF participation a condition of further loan disbursements.

In forecasts issued late Wednesday, the IMF attributed Athens’ bigger- than-expected primary surplus of 3.3 percent in 2016 to “temporary factors.” Greece’s economic recovery is hanging by a thread with many fearing it could be thrown into reverse unless a deal is reached and the uncertainty is ended given the country’s tight €7.5bn debt repayment deadline early July.

But speaking to reporters today, Greece’s government spokesman said the country’s extraordinary over-performance “finally noted by the Fund” would determine the fiscal path it would take once its current 86 bn euro bailout programme ended in September 2018.

The government’s over-arching aim was for primary surpluses to be reduced, he said, so that the Greek economy could regain its potential and achieve the highest possible rates of growth.