EU's Moscovici heads to Greece for debt talks

Top EU economic affairs official Pierre Moscovici said he is heading to Athens for talks with Greek Prime Minister Alexis Tsipras on Wednesday in an effort to unblock bailout negotiations. Months of failed talks between Athens and its eurozone and IMF creditors have alarmed markets and raised fears of a new debt crisis that could again jeopardise Greece's place in the euro. "Intensive meetings are taking place and I will myself visit Athens on Wednesday," Moscovici told reporters in Brussels on Monday. The former French finance minister said he would meet with Tsipras as well as Finance Minister Euclid Tsakalotos during the visit. Moscovici, who is viewed as an ally of Athens, said that all sides should avoid any needless instability, calling Greece a potential "success story". "We cannot, just like that, bring a crisis to the recovery in Greece amid global uncertainty," he said. Tsipras on Saturday warned that the International Monetary Fund, as well as hardline Germany, should "stop playing with fire". Talks on Friday between Athens and its creditors failed to end the stalemate, though Eurogroup head Jeroen Dijsselbloem said substantial progress had been made. In Athens, Greek central bank chief Yannis Stournaras warned that a quick resolution was crucial in order to avoid the chaos of 2015 when Greece defaulted and just barely survived in the eurozone. "Any later, the conditions will be much worse and it will be too late," Stournaras told lawmakers. Those remarks helped send Greece's two-year debt rates soaring to above 9.0 percent on the markets, a dangerously high level. - Bad data - The Greek government faces debt repayments of 7.0 billion euros ($7.44 billion) this summer that it cannot afford without completing the current review of its rescue which would unblock new loans from the country's 86-billion-euro bailout. The core of the row is whether Greece can deliver on budget targets that the International Monetary Fund says are based on overly-optimistic economic forecasts. The IMF, quietly backed by Germany, insists that more pension cuts and tax hikes are necessary to reach those targets. The Tsipras government bitterly refuses more reforms. Complicating matters even further, the fund has also made a call for substantial debt relief for Greece, which is a political non-starter in Germany. The EU on Monday confirmed its positive view of the Greek economy, predicting that it would grow at a healthy clip of 2.7 percent this year. "The problem is that the IMF is coming with very pessimistic growth and fiscal forecasts as regards Greece," European Commission vice-president Valdis Dombrovskis said in a speech in Frankfurt. "Moreover it is not correcting those forecasts based on facts, based on the actual outcomes in 2015 and 2016," he added. The next meeting of eurozone ministers on February 20 is seen as an unofficial deadline to resolve all the various issues. Fears are that a series of knife-edge elections in Europe, beginning in the Netherlands on March 15, will dangerously delay a resolution.