Brussels, 31/05/2013 (Agence Europe) - The chair of the Eurogroup, Jeroen Dijsselbloem, said on Friday 31 May that the Eurogroup was prepared to take further measures to ease the Greek debt burden as long as the country achieves its budget targets, but warned that the eurozone will not discuss the matter before April 2014.
Dijsselbloem, who is the Dutch finance minister, said that agreement should be reached on the mechanics of direct recapitalisation of banks from the European Stability Mechanism (ESM) in June. This would allow countries to request aid to bail out its banks without worsening their own debt, and Greece would like this to operate retroactively (see EUROPE 10847). He was rather optimistic about this.
On Friday, the European Financial Stability Fund (EFSF) made a €7.2 billion payment to Greece in the form of bonds. The €7.2 billion had been made available in January and will be used to recapitalise Greek banks, a process that is due to be concluded shortly. EFSF director general Klaus Regling said: “The funds transferred to Greece should help to create a healthy and functioning financial sector, which is a precondition for the recovery of the Greek real economy”. On Thursday, the Greek finance minister, Yannis Stournaras, said that 2013 will be the last year of recession for the Greek economy. On Wednesday, however, the OECD published economic forecasts that suggest that Greek GDP will shrink by 1.2% in 2014. The OECD says Greece might need new finance as part of the structural adjustment programme introduced in connection with the troika (European Commission, European Central Bank and International Monetary Fund) if growth is more feeble than forecast.
At a meeting the same day with his French counterpart, Pierre Moscovici, Stournaras discussed issues on the Greek economy, like privatisation. During his official visit to Greece in February, the French president, François Hollande, said he was planning to encourage French companies to invest in the privatisation process in Greece, a process that is currently flagging (see EUROPE 10789).
On Friday, the IMF was due to decide on the payment of an aid instalment of €1.8 billion for Greece. Greek newspapers say the Euro Working Group at the EU Council of Ministers will examine Greece's progress on 7 June and decide on the disbursement of the remaining €3.3 billion of a €7.5 billion aid instalment (€4.2 billion of which was paid earlier in the month). (EL/transl.fl)