Luxembourg, 15/10/2013 (Agence Europe) - The eurozone hedged its bets on Monday 14 October on the question of financing the Greek aid programme in the latter half of 2014, although a preliminary discussion was held at the Eurogroup meeting in Luxembourg.
Jörg Asmussen, a member of the European Central Bank (ECB) Executive Board, set the tone by saying that he thought between €5 billion and €6 billion would be needed to fill the funding gap in the second half of 2014. The head of Eurogroup, Dutch finance minister Jeroen Dijsselbloem said he was surprised at the figures he'd heard at the beginning of the meeting. Emerging from the meeting, Greek finance minister Yannis Stournaras is reported by Greek media to have quoted a figure of €5 billion, although the European Commission says that no formal timeline has been drawn up and finance ministers are no longer planning to decide how to fill the financing gap in November. December appears more likely.
The International Monetary Fund (IMF) did not attend the Eurogroup meeting and will have to relinquish visibility for the year ahead on financing of the Greek programme, which is one of the conditions for its participation in the bailout and for disbursement of aid of €1.8 billion expected in the third quarter of 2013. Asked whether there was friction with the IMF, French economy minister Pierre Moscovici said the eurozone was on schedule.
The eurozone is awaiting further details from the troika (the European Commission, the ECB and the IMF) whose assessment mission was broken off at the end of September and will resume shortly to discuss the matter of financing. Asmussen said that there was no way that a roll-over of Greek debt held by the ECB or eurosystem central banks would be possible to fill the funding gap (in other words swapping securities arriving at their maturity for new securities with a longer maturity) because this would amount to monetary financing, which is not allowed under the EU treaties. Stournaras, however, said that no options had been ruled out.
The emergence of the financing gap is due to central bank reluctance to swap the securities they own. Dijsselbloem said that Greece's financing needs post-2014 would be assessed next year. Stournaras suggested that between €10.5 billion and €10.8 billion would be needed.
There are contradictory views on another aspect of the Greek programme, the budget gap for 2014, which Asmussen said would be significant. The eurozone says it is too early to comment because the troika is due to resume its assessments, but Dijsselbloem said there were budget matters to be sorted out. Euro Commissioner Olli Rehn said the ball was in the Greek camp and he was confident the country would achieve its budget targets. Stournaras said there wasn't a budget gap as far as Greece was concerned. Greek newspaper Kathimerini talks of a request from the eurozone for additional savings of €2 billion in 2014, but Athens refuses to countenance any further cut in its budget. (EL/transl.fl)