Brussels, 04/12/2015 (Agence Europe) - On Monday 7 December, Eurogroup will discuss implementation of Banking Union and the third Greek financial bailout.
After a year in her post, the chair of the Single Resolution Board at the ECB, Danièle Nouy, will brief the nineteen finance ministers on supervision of big European banks following the recent bank health checks (see EUROPE 11431). Eurogroup will discuss the “prudential challenges” facing European banks, particularly the many “national options and discretions” hindering the formation of a uniform body of rules, explained a high-ranking European official (see EUROPE 11413). The European Commission will work on this in its approach to reducing financial risks alongside the implementation of Banking Union.
Greece. The ministers will discuss progress in implementation of the third Greek bailout. No policy or operational conclusions will be drawn, explained the high-ranking official.
The second list of milestones recently agreed upon by the 'institutions' (European Commission, ECB, IMF and ESM) representing the lenders and the Greek authorities need to be implemented by 11 December to make it possible for a €1 billion sub-instalment of aid to be disbursed. This €1 billion will expire this month if the reforms are not implemented, meaning that it would return to the overall aid programme allocation and new conditions would be introduced for its disbursement. The high official hoped that the first monitoring mission for implementation of the bailout would be able to end at the start of February 2016, but expected “tough” negotiations over reform of pensions and taxes on farmers.
Once the first monitoring mission is complete, the eurozone will be able to focus on the Greek debt in the light of new projections to be supplied by the 'institutions.' Quizzed about the IMF's position (it has called for a cut in the Greek debt's nominal value), the high-ranking official said that most conversations recently had concentrated on the concept of gross financial needs. A cut in the nominal value didn't make any sense financially, explained the source, given the significant values taken in the past to reduce the Greek debt.
Portugal. Eurogroup will be briefed on the work programme in Portugal by the country's new finance minister, Mario Centeno. The source said it remained to be demonstrated that the programme would keep Portugal on track in for budget consolidation and competitiveness-friendly reform. (Original version in French by Mathieu Bion)