Brussels, 07/06/2016 (Agence Europe) - The Treasury Directors of the Eurozone countries ('euro working group') could declare, this week, the first monitoring mission of the third Greek bailout plan, with an envelope of €86 billion from the European Stability Mechanism (ESM), finalised.
The final elements concern the concession granted to investors from China and certain Arab states regarding the site of the former airport of Hellinikon and the sale to Deutsche Telekom of 5% of the shares in the telecoms operator OTE, the Greek press reports.
By giving the green light, the creditors of Athens are expressing their approval of all of the prior measures requested of the Greeks: a package of measures equivalent of 3% of Greek GDP. This includes such elements as reforms of pensions and income tax, a budgetary brake mechanism to be activated if Athens deviates from its budgetary trajectory up to 2018, the adoption of a strategy to deal with the stock of non-performing bank loans and the creation of a privatisation and optimisation fund for Greek assets.
On this basis, countries which require the approval of their parliaments will be able to recommend that the national MPs approve the payment of the tranche of aid of €10.3 billion pledged by the Eurogroup at the end of May (see EUROPE 11557). Meeting on the Council of administration of the ESM, the Eurozone finance ministers will formally make this money available in Luxembourg on Thursday 16 June.
“I am confident that Athens will use the time ahead of the next Eurogroup meeting to close the few small points which are still open, to allow the member states to conclude their parliamentary procedures, in line with their individual national frameworks. The ESM authorities will then, next week, be able to make the decisions needed to release the payment”, the Commissioner for Economic and Financial Affairs and Taxation, Pierre Moscovici, told the MEPs in Strasbourg on Monday evening.
The Commissioner gave the details of the terms for the payment of the €10.3 billion tranche: - €7.5 billion will be paid across in June to cover the needs related to the servicing of the debt (€5.7 billion) and to absorb the public administration payment arrears (€1.8 billion); - the next disbursements will come after the summer to deal with arrears (€1.7 billion), whilst the remaining €1.1 billion will be subject to the privatisation efforts.
Stressing the importance of the implementation of the reforms, the Commissioner for the Euro, Valdis Dombrovskis, reminded the European Parliament that Athens and its creditors would once again, in the autumn, revisit the measures aiming to return the Greek public debt to viability. The IMF will make a decision before the end of this year as to whether or not it will participate in the Greek bailout plan, on the basis of the ambition of the measures to be decided upon to reduce the burden of the debt, the stock of which will pass the 180% of GDP mark this year. Between now and 2018, the measures to be taken to improve the management of the debt will be “extremely limited”, Moscovici admitted. The measures anticipated for the medium term - or until the three-year Greek aid plan is complete - could be applied; this is not an obligation, but I feel that it will be necessary in everybody's mind, he added. (Original version in French by Mathieu Bion)