On Monday 13 February, the European Commission spoke out against the attitude of the IMF, whose economic forecasts regarding Greece are felt to be overly pessimistic, with prospects of finalising the second monitoring mission of the third Greek bailout plan before the Eurogroup meeting of Monday 20 February seeming to be slipping away.
“We cannot base future decisions on more pessimistic figures than our own”, said the Commissioner for Economic and Financial Affairs, Pierre Moscovici, when presenting the Commission's winter economic forecasts (see other article). He also observed that the figures put forward by the Europeans on Greece's budgetary performances were still “the right ones” and that very often, Greek performances had proven better than anticipated. Speaking from Germany, his counterpart in charge of the euro, Valdis Dombrovskis, agreed. “The problem is that the IMF is coming with very pessimistic growth and fiscal forecasts as regards Greece. Moreover, it is not correcting those forecasts based on facts, based on actual outcomes”, he said, reported by the news agency Reuters.
The two Commissioners feel that a political agreement in the very near future, allowing the second monitoring mission to be finalised, is entirely possible.
The Commission predicts that Greece will return to growth from 2016 (+0.3% of GDP) and that this will step up in 2017 (+2.7%) and 2018 (+3.1%). The Greek deficit in nominal terms will stay at -1.1% of GDP in 2017 from 2016, to be converted into a budgetary surplus in 2018 (+0.7%), assuming an unchanged policy. As for the primary budgetary surplus (not including servicing of the debt), this is expected to stabilise at around 2% of GDP in 2017 and to be in excess of 3.5% in 2018, in line with the target laid down in the bailout plan.
As the aid plan requires Athens to maintain this primary budgetary surplus at 3.5% of GDP beyond 2018, the political battle is being fought mainly around the number of years to be laid down post-2018 and the creation of a mechanism whereby Athens would undertake in advance to adopt corrective measures after 2018 should its budgetary trajectory deviate from the objectives set. A mechanism of this kind already exists in the framework of the Greek bailout plan that the IMF will not be coming on board until it deems the Greek government debt viable.
On Friday 10 February, the president of the Eurogroup, Jeroen Dijsselbloem, noted progress in negotiations between Athens and its creditors following a negotiation session in Brussels.
Greece will see a reimbursement peak of €6 billion in July. Concluding the second monitoring mission of the bailout plan would pave the way for a new tranche of financial aid to be granted, or even for Greece to be able to join the 'quantitative easing' operation of the ECB. (Original version in French by Mathieu Bion)