Brussels, le 20/11/2012 (Agence Europe) - On arrival in Brussels on Tuesday 20 November, the head of the Eurogroup, Jean-Claude Juncker, said that there was a good chance that the Eurogroup would reach a final agreement on continuing the second Greek bailout (see EUROPE 10733) but said he was not 100% certain. Germany's Finance Minister Wolfgang Schaüble hoped something tangible could be announced on Tuesday evening, while Spanish Finance Minister Luis De Guindos said Europeans had to find a credible solution for Greece.
The eurozone is focused on finding an answer to the conundrum of the viability of Greece's debt, the final sticking point to be dealt with before the next batch of aid can be released (of up to €44 billion). IMF Director General Christine Lagarde and Euro Commissioner Olli Rehn praised the constructive atmosphere of the current talks. Olli Rehn warned: “We should be ready to take further decisions in the next years and of course it depends on the implementation of the programme by Greece in the coming year”. Greek debt might rise to almost 190% of GDP in 2014. In the spring of this year, the agreement on the second Greek bailout included the requirement that the debt fall to 120% of GDP in 2020.
Irish Finance Minister Michael Noonan said that the extra time for Greece to meet its debt commitments would require new cash, the problem being where exactly the new cash was to come from. Several eurozone nations reject the idea of a write-down in the value of the Greek bonds held by institutions - countries including Germany and Finland. Austria's Finance Minister Maria Fekter said there would be “No fresh money. We could lower Interest rates but some countries have a problem with this”.
The ministers were also expected to discuss how to finance the two extra years for Greece (to 2016 rather than 2014) for it to cut its budget deficit to 4.5% of GDP.
In parallel, the eurozone countries have started with their national procedures for authorising the next batch of aid for Greece. On Wednesday, the parliamentary groups at the Bundestag in Germany will discuss the outcome of the Eurogroup vote - a vote that might take place next week.
The leader of the Greek Democratic Left party, Fotis Kouvelis, hoped to see immediate disbursement of a first batch of aid, of at least €31.5 billion. Schaüble said that the simultaneous payment of a number of batches of aid, of a total of €44 billion, was “logical” as long as a monitoring mechanism is introduced. (EL/transl.fl)