On Monday 10 October. eurozone finance ministers paved the way for payment of part of the financing still available for helping Greece service its public debt, as part of the first monitoring mission for the third Greek bailout.
Of the remaining sub-batch of €2.8 billion from the full batch of €10.3 bn, €1.1 bn will be paid out initially. This decision is designed to recognise the Greek authorities’ efforts. They were due to implement 15 prior actions in order to be able to receive the sub-batch.
The Eurogroup has in effect welcomed the progress in reforming the pension system, governance of the bank sector and setting up an independent income-collecting agency. Greece is complying with its contract and therefore European solidarity is being expressed, explained French finance minister Michel Sapin upon arrival in Luxembourg.
The remainder of the second sub-batch available under the first monitoring mission for the third bailout, €1.7 billion, will be paid out later this month and will all go to reimbursing Greek government payment arrears to its suppliers. Payment of this sum will depend on updated figures and is purely technical, explained the head of Eurogroup, Jeroen Dijsselbloem. Economic and Financial Affairs Commissioner Pierre Moscovici said that the four prior actions required from Greek would be completed.
The Eurogroup sys it is still a priority to make introduction of governance structures for a new Greek privatisation fund, HCAP, operational before the end of the year.
Start of second monitoring mission
The Eurogroup’s decisions officially pave the way for the second monitoring mission for the Greek bailout, which will include reform of the labour market via reviving collective bargaining agreements put on hold during previous bailouts.
Experts from the 'institutions' (European Commission, ECB, IMF and ESM) will return to Athens in mid-October to resume talks with the Greek government.
The question of the IMF’s involvement in the Greek bailout is still on hold. The Washington institute is demanding that European lenders substantially reduce Greece’s public debt, which it says is the only way the country can achieve its medium-term budget targets of a primary budget surplus (not including debt-servicing) of 3.5% of GDP in 2018 and beyond. A decision that Europe does not want to take in the near future and certainly not until a new government is in place after the autumn 2017 elections.
Dijsselbloem refuses each month to enter talks about easing the Greek debt burden. He pointed out the Eurogroup’s May agreement on short, medium and long-term measures in this domain (see EUROPE 11557), adding that on this basis, the European Stability Mechanism should submit tangible proposals for short-term measures to national treasury experts. (Original version in French by Mathieu Bion)