Brussels, 19/02/2015 (Agence Europe) - On Thursday 19 February, the President of the Eurogroup, Jeroen Dijsselbloem, announced that he had received a Greek request for a six-month extension of the financing agreement concluded with the eurozone.
More specifically, Greece has asked for an extension of the 'Master financial assistance facility agreement' (MFAFA). The Greek government of Antonis Samaras had already requested a two-month extension of this agreement, in December of last year. On this basis, the Eurogroup will meet physically, rather than by telephone conference, in Brussels this Friday 20 February. On Thursday afternoon, the national experts were preparing the ground at the working group on the euro.
The Commission explains that this 'MFAFA' is the “legal term to describe the current programme in detail”, said Margaritis Schinas, a spokesperson for the institution. This text, which was signed in 2012, clearly states that the availability of the assistance of the European Financial Stability Fund (EFSF) is conditional upon the “Beneficiary Member State's compliance with the measures set out in the memorandum of understanding ('MoU')” and on the favourable decision for a payment to be made by the EFSF guarantor states, on the basis of the conclusions of the regular assessment missions.
In his letter, the Greek finance minister, Yanis Varoufakis, writes that the Greek authorities will honour the country's financial obligations “to all its creditors” and stresses their intention to cooperate with their partners, in order to avert technical impediments in the context of the MFAFA, “which we recognise as binding vis-à-vis its financial and procedural content”. The six months' extension, during which the “best use of the given flexibility in the current arrangement” will be made, will allow work to be carried out towards its “successful conclusion” on the basis of the proposals of the institutions and of government. The government wants a mutual agreement on an implementation of the agreement which will stabilise Greece's budgetary situation, notably to achieve “appropriate primary fiscal surpluses”. The government undertakes to refrain from any unilateral action which would undermine the budgetary objectives, economic recovery and financial stability. It calls for the ECB (European Central Bank) once again to accept the Greek debt as collateral and for the availability of the EFSF bonds put aside for the banks in the HFSF to be extended. The government also aims to start work with the technical teams on a possible “new contract for recovery and growth” between Greece, the eurozone and the IMF. During the extension period, it agrees to the principle of supervision by the Commission, the ECB and the IMF, even though the Greek government had roundly rejected the presence of the 'troika' in Athens. Lastly, Greece calls for a discussion on new debt measures, as the Eurogroup pledged to do in November 2012.
A Greek government source, quoted by AFP, said that Greece was in line with its promises and “had not asked for an extension of the memorandum”, but of the loan agreement. Germany immediately picked up on this tactic. The letter from Athens “is not a proposal that leads to a substantial solution”, said Martin Jäger, spokesperson to the German Ministry of Finance, stated in a press release, adding that it went in the direction of “bridge financing, without fulfilling the demands of the programme”.
For its part, the Commission describes the Greek letter as a “positive sign, which can pave the way for a logical compromise for the benefit of the financial stability of the eurozone as a whole”. The President of the Commission, Jean-Claude Juncker, held several discussions during the night, Schinas said. Slovakia has joined Germany in drawing its lines in the sand. “It would be impossible to explain to the public that 'poor' Slovakia should compensate Greece”, the Prime Minister of Slovakia, Robert Fico, told the Financial Times. Fico, and the Estonian finance minister, Maris Lauri, believe that a 'Grexit' would have little effect. The Italian minister, Pier Carlo Padoan, told l'Espresso that he supports the Greek request. (Elodie Lamer)