Brussels, 28/04/2016 (Agence Europe) - Due to the Greek Easter holidays, Greece and its institutional creditors will continue their negotiations remotely in the framework of the first monitoring mission of the third Greek bailout plan, with the aim of holding a conclusive Eurogroup meeting no later than the second week of May.
“The 'institutions' and the Greek authorities have made important progress on a policy package that could pave the way for discussions on debt sustainability and the conclusion of the first review of the third Greek programme”, said the group of four creditors of Athens (European Commission, ECB, IMF and ESM), in a joint press release dated Thursday 28 April. The press release goes on to add: “all 'institutions' will continue to work from headquarters with the authorities and member states on the final elements of an overall policy package”. These final elements must respect the “spirit and the letter” of the declaration of the Eurozone summit of July 2015 on which the third Greek bailout plan is based, said Mina Andreeva, on behalf of the Commission.
The negotiations are stumbling mainly over a package of measures equivalent to 2% of GDP required by the creditors of Athens and which would apply only if Greece should deviate from its budgetary trajectory targeting a primary budgetary surplus of 3.5% of GDP in 2018 (see EUROPE 11541). The IMF is insisting on these, the ECB approves of them, and the Commission has agreed to them reluctantly.
Stressing that it is possible to legislate on an ex ante basis, the Greek government does not want these measures, which are certain to prove unpopular, to go into too much detail, and has proposed the creation of a specific mechanism. This will be an “automatic mechanism that will affect public expenditure once deviations have been observed” and will oblige the finance minister to take action, a diplomatic source explained.
Speaking from Paris on Wednesday evening following a meeting with French finance minister, Michel Sapin, the President of the Eurogroup, Jeroen Dijsselbloem, said that many countries have set similar measures in place, either through a 'fiscal brake' or automatic tax measures if the budget gets off track. As regards a Eurogroup meeting which would politically rubber-stamp the finalisation of negotiations at technical level, he said that there was a “sense of urgency that we all share” that would allow such a meeting to be held “next week or ultimately the week after”. (Original version in French by Mathieu Bion)