Luxembourg/Brussels, 14/09/2015 (Agence Europe) - The eurozone does not seem concerned about the early elections in Greece on Sunday 20 September.
On the one hand, the most recent votes at the Greek parliament have revealed broad support for the reforms included in the third Greek bailout and, on the other hand, Eurogroup says that satisfactory work is continuing with the caretaker government, adding after the Eurogroup meeting in Luxembourg on Saturday 12 September, however, that there was little room for renegotiating said programme.
Benoît Coeuré, of the ECB executive board, gave details on Friday. He said that in the framework of the first review of the third Greek bailout (expected in October), they would discuss the full range of policies, some would be fleshed out in detail, but others not in such detail so there was room for discussion as long as the programme's objectives were respected. The head of Eurogroup, Jeroen Dijsselbloem, agreed, saying he didn't think any major political renegotiation would be needed given the broad support in the Greek parliament.
Economic and Financial Affairs Commissioner Pierre Moscovici said that depending on needs, measures would be taken in October to allow the payment of one or two billion euros.
After the first monitoring mission, the ECB will be able to decide whether to accept Greek debt as collateral again if the Greek government respects the terms of aid plan (see EUROPE 11361).
Bank recapitalisation. The director general of the European Stability Mechanism (ESM), Klaus Regling, said that greater clarity on the financial needs of banks would be forthcoming in October when the results of the stress tests on the four big Greek banks carried out by the single supervision mechanism at the ECB are published.
Under the third aid plan for Greece, €10 billion are already sitting in a special account that could be disbursed rapidly following examination by DG Competition at the European Commission, and in theory a separate €15 billion will be available after the first monitoring mission.
Dijsselbloem said bank recapitalisation was urgently needed in Greece “for the simple reason of economic recovery, recovery of the banks.” He said that the deepest bail-in would apply, including senior lenders. A diplomat said, however, that Greek banks are not particularly exposed to senior debt.
IMF. The first monitoring mission will give greater clarity about the IMF's involvement. A eurozone source said that when it comes to finance, the IMF is unlikely to contribute any more than €16 billion, the amount of finance remaining in the second programme.
The viability of the Greek debt is likely to be analysed in the light of debt-servicing, but the debt-GDP ratio is not expected to be totally set aside. Colossal debt scares off investors, the IMF has incessantly pointed out over recent years. The diplomat says this argument will be taken on board. (Elodie Lamer)