Brussels, 14/03/2014 (Agence Europe) - On Friday 14 March, the European Commission said that the troika of lenders (Commission, International Monetary Fund and European Central Bank) would be working flat out with the Greek government to reach agreement as soon as possible on the fourth monitoring mission on the Greek aid programme - a mission that began in September 2013.
On Monday, the Eurogroup called for positive results to be achieved this week on the outstanding issues that have been in discussion for months now (see EUROPE 11036). Meetings with Greek finance minister Yannis Stournaras resumed on Thursday after he held talks with the European Parliament in Strasbourg on Wednesday on the bank resolution mechanism (ESM - see EUROPE 11038). On Friday, Greek media quoted government sources who hoped agreement could be reached on Sunday 16 March. A eurozone source was sceptical, commenting: “Monday will be difficult, but might be doable”. On Friday, European Commission spokesman Simon O'Connor said: “We're working as hard as possible to reach an agreement”, but could not give further detail about timing. Similar comments were made by Stournaras, who said on Thursday evening that the prospects of a deal were “difficult, but not pessimistic”.
A source says the the Eurogroup meeting on Monday was characterised by impatience rather than optimism, as was hinted by German finance minister Wolfgang Schaüble in an interview on Wednesday with Greek newspaper To Vima. He said that the eurozone's finance ministers had noted that Greece had not met its commitments and they would not be forcing the country to accept aid if it did not want it.
The outstanding issues are mostly related to the structural reforms in the OECD's toolkit of recommendations, like the liberalisation of public markets (dairy products and medicines, for example). In theory, the Greek Parliament will discuss this before Easter. Pharmacists went on strike on Friday and Saturday in protest against the measures.
One area of disagreement is how to use the primary budget surplus (not including debt servicing costs). For around a year now, Greece has said that it is planning to hand out the cash to sections of the population who have suffered the most from the austerity drive, as Stournaras told EUROPE in May 2013 (see EUROPE 10847). The Commission said back then that the troika agreed to the idea in principle, but that it would need to be discussed and caution was de rigueur (see EUROPE 10860). At present, the troika is recommending using the budget surplus to reduce state debt or on growth stimulus measures.
A eurozone source said that banking sector questions have been postponed and the focus needs to be on bank recapitalisation and a draft law to be voted upon by parliament.
If agreement is reached over the weekend, the Eurogroup will be able to give the go-ahead to payment of the next batch of aid from the European Financial Stability Fund. Just over €10 billion remains of the amount earmarked for Greece. The ministers are expected to provide assurances that they will continue to provide aid to the country (assurances needed by the IMF - which requires visibility over the funding of the Greek programme for the next 12 months before it can issue its own aid payments). (EL)