Europe’s finance ministers discussed during the EuroWorking Group (EWG) meeting the Greek proposal on contingency mechanism requested by the International Monetary Fund (IMF).

According to information, the proposal presented by Greek Finance Minister Euclid Tsakalotos is based on two axes: the non-exemption of basic state expenditure, i.e. salaries and pensions, so as to cover any deviations and the technical characteristics of the contingency mechanism.

Any deviations will be based on data provided by ELSTAT and will concern the previous year. The data will be examined by the European institutions. The proposal of the Greek side provides that Greek Finance Minister will write a progress report of the Greek economy every April indicating any irregularities so that the mechanism could be activated. In this framework, the report will be reviewed by the Greek Parliament and the European institutions.

Greek Finance Minister Euclid Tsakalotos said in the press conference that “This was a very good eurogroup for Greece, and I think a very good eurogroup for Europe”, adding that there was a “very interesting exchange of views” on the issue of Greek debt relief and supported the ‘three-layer’ approach, to tackle Greek debt relief on a short, medium and long-term basis.

“Our expectation is that by 24 May we’ll have an agreement on fine-tuning the contingency measures, and we may also have agreement on debt relief too” Tsakalotos said.

EC vice-president Valdis Dombrovskis tweeted that Eurogroup ministers welcomed the package of measures which Greece has agreed and that discussions will continue on May 24th, at the next scheduled Eurogroup meeting.

The head of Eurogroup Jeroen Dijsselbloem said that “today’s eurogroup meeting held a “first round” of talks about Greek debt relief.”

“They are now looking at Greece’s annual gross financing needs, rather than the debt/GDP measure,” he said adding that “they considered Greece’s short-term, medium-term and long-term debt sustainability”.

“In the short term, they are looking at ways of optimising Greece’s debt to lower repayment costs,” he said.

The IMF is “less optimistic, or more conservative if you will” about how Greece’s economy will perform by 2018, Dijsselbloem said adding that “the extra contingency measures are needed, in case the Fund are right”.

Commissioner Pierre Moscovici said that ensuring the sustainability of Greece’s debt is a “fundamental element” of the agreement reached last summer, while Klaus Regling confirmed that Greek debt relief talks began today.