Brussels, 18/02/2015 (Agence Europe) - On Wednesday 18 February, Greece confirmed its intention to request a six-month extension to the loan agreement concluded with the Eurozone. This position seems to have changed little since Monday, but could clash with the view the country's creditors take of the situation.
“It's not about an extension of the loan programme, it's about whether this programme is fulfilled, yes or no”, the German finance minister, Wolfgang Schäuble, said on the German television channel ZDF on Tuesday.
The Commissioner for the Euro, Valdis Dombrovskis, explained on Wednesday 18 February that he was waiting to see what the Greeks were going to ask for “in black and white”. “It will depend on the exact meaning and substance used in the wording” of the request, he explained.
A technical meeting of the Council's working group on the euro will be held this Thursday, once the Greek request has been received. On the basis of the substance of the talks and how open the Eurozone is to the wording of the Greek request, a Eurogroup meeting may be convened on Friday, either in person or via telephone conference.
On Monday, “the approach at the Eurogroup was clear: the most realistic way is an extension of the current programme”, with the condition that this be the case even if flexibility is possible, Dombrovskis said. When asked about the announcements made the day before by the Greek Prime Minister, Alexis Tsipras, on a vote on Friday on social measures, he explained that this was a point which the Eurogroup had specifically dealt with, in other words the requirement for Greece to avoid unilateral measures in the framework of its extension request (see EUROPE 11255).
Some adjustments are possible, but should not substantially change the programme, Dombrovskis said. On Monday, after the Eurogroup meeting, the Greek minister, Yanis Varoufakis, stressed that he was not interested in “cosmetic” changes to the aid plan, which expires at the end of this month (see EUROPE 11254).
On Tuesday, the Commissioner for Economic Affairs, Pierre Moscovici, said that was “convinced that it will be possible to strike a balance between the changes in policy the Greek government wants to make and the current programme”.
A 'non paper' leaked from the Greek finance ministry explains that Athens is committed to a primary budgetary surplus of 1.5% of GDP in 2015, and to maintain this target until normal conditions are then restored and the debt/GDP ratio is back on a downward trajectory. “We see that the financial and economic situation is currently not getting any better. There are some worrying tendencies. While discussing this arrangement, this is one of the factors which may be taken into account”, Dombrovskis said. A further aim is not to make the debt situation any worse, he added.
He pointed out that in order for Greece to benefit from the money remaining in the programme, the monitoring mission of the creditors on the ground needs to be completed. Athens wants to benefit from €1.9 billion in profits to be on-lent by the ECB to pay back the IMF, in March. It states that it is open to having this money paid directly to the IMF. Greece hopes that an agreement with the Eurogroup will allow the ECB to accept the eligibility of the Greek paper as guarantees to allow the banks to take funding from it. Again in the document prepared ahead of the latest Eurogroup meeting, the Greek government states that it wishes to discuss with its partners the “mobilisation of remaining unspent resources available to the Hellenic Financial Stability Fund”.
However, the vagueness regarding the existence of a draft declaration by the Commission which is acceptable to Greece has weakened the country's negotiating position. If the Commission sees it as an attempt to divide the members of the Eurogroup, it is also felt that it has in fact had the opposite effect and served to close their ranks.
“There is no need to try to create divisions”, said Dombrovskis. The day before, Moscovici stressed that the Commission was trying to “fully play its mediation role”. “There is not one draft (text) against another”, Moscovici explained.
It is reported that at the Eurogroup meeting, certain countries stressed that Greece was not alone in the world. This was the case for countries with a minimum wage already lower than the one Greece hopes to raise and countries formerly under a programme which stuck to the adjustment programmes to be applied to the letter, in exchange for financial support. Greece still had some allies on Wednesday, however. In a telephone call between the Greek authorities and the President of Cyprus, both sides agreed that the latter will speak to the President of the Commission, Jean-Claude Juncker, to help pave the way for a European solution to be found (our translation throughout). (Elodie Lamer)