Brussels, 04/03/2016 (Agence Europe) - On Monday 7 March, eurozone finance ministers will discuss the Greek bailout and the upcoming exit by Cyprus from its bailout plan
Monday's Eurogroup will be the last before Cyprus exits its structural adjustment plan at the end of March. The country has not requested a preventative credit line from the European Stability Mechanism (ESM) to help it return to financial autonomy. The island's situation is comfortable, explains a European source. One prior action remains to be implemented, namely privatisation of telecoms operator CYTA, but that will not happen until after the end of the programme because general elections are looming. Another diplomat explained that the Cypriot programme has been a great success so this won't really have much impact. Of the initial ESM package of €9 billion, Cyprus needed €6.3 billion in the end.
Greece. Greece and its lenders have agreed on the need to conclude the first monitoring mission for the Greek bailout as rapidly as possible, although the Greek government has sufficient cash flow to cover upcoming payments. To this end, the chiefs of the monitoring mission representing the country's lenders (European Commission, ECB, IMF, ESM) will need to return to Athens, and a positive decision on this issue is likely to be made at the Eurogroup meeting or shortly afterwards.
The first European source said that a few questions remain unanswered on the substance of the negotiations. The other diplomat described the situation as follows: the IMF says that budget measures taken to date do not go far enough because the countries economic situation deteriorated in 2015, but the other 'institutions' do not take this view. At the European Parliament on Wednesday, Greek finance minister Euclid Tsakalotos found it 'difficult to understand' the IMF's position (see EUROPE 115053).
The minister added that the Greek bailout plan could not be viewed independently of the refugee crisis faced by the country. The first European source said, however, that there was 'no legal link' between the two issues. She said that delaying pensions reform would harm Greece, although the country's efforts to deal with the flood of refugee was having 'serious implications' on the budget. The source admitted that there are a number of ways of taking budget measures and introducing reforms, as long as the end targets are not altered.
Budgets for 2016. The ministers will issue a statement on budget plans for 2016. The budgets of five member states (Austria, Spain, Italy, Lithuania and Portugal) risk not complying with the Stability and Growth Pact (see EUROPE 11437 and 11488).
Finally, Eurogroup will formally adopt measures to make its work more transparent (see EUROPE 11488). (Original version in French by Mathieu Bion and Elodie Lamer)