Brussels, 30/09/2013 (Agence Europe) - On Sunday 29 September, the troika of lenders (the European Commission, the European Central Bank and the International Monetary Fund) announced that it is interrupting its assessment mission to allow technical work to be completed.
The troika said it had made good progress with the Greek authorities during its mission and will return to Greece in the next few weeks, probably after the Eurogroup meeting of 14 October. Meanwhile, Greece has to put the finishing touches to its 2014 budget for the 7 October.
An EU source said that no agreement had yet been reached on any aspect of the troika's mission, but some media say that agreement is not far off on the scale of the recession (-4%, according to Reuters) and the primary deficit, both for 2013. The troika's final assessment will be used to decide whether the disbursement of the next batch of aid, €3.1 billion, from the EFSF for the third quarter of 2013 can be paid in line with the timeline drawn up in July 2013. An instalment of €1.8 billion is awaited from the IMF.
The troika also needs to decide on four “prior actions” for disbursement of a €500 million sub-tranche of aid from the EFSF. The Council of Ministers' Euro Working Group will make the decision based on the recommendations of the three troika institutions. In October, Eurosystem central banks will return €500 million of the profits they've made from the SMP bond purchase system. This €500 million, together with the €1.5 billion already received from Eurosystem central banks in July, should go straight into a blocked account used for repaying the debt.
The mission will take four stages - assessing the budget gap for 2013 and 2014; assessing the financing gap for the end of 2014 (which will be discussed at Eurogroup in November); assessing the financing gap for 2015 and 2016 (later this autumn) and debt viability.
The latter aspect will not be formally discussed by the eurozone finance ministers until April 2014, when Eurostat has issued the final assessment of the country's primary budget surplus, and the financing gap for the Greek programme for the end of 2014 will be settled in November. The Commission estimates that it will be somewhere in the order of €3.8 billion, which the eurozone can manage. Eurozone representatives who have spoken about the matter, however, such as the heads of Eurogroup and the ECB (see EUROPE 10915) suggest that there will be strings attached to the new aid to cover the financing gap. Greece disagrees. (EL/transl.fl)