The Commissioner for Economic and Financial Affairs, Pierre Moscovici, said in Athens on Wednesday 15 February that the prospect of Greece leaving the euro zone (Grexit) is no longer a threat, with tension rising between Greece and its creditors as the Eurogroup meeting scheduled for Monday 20 February comes closer.
“I have dedicated much of my efforts in recent years to avoiding Grexit: this would damage the integrity and even the raison d'être of the euro. This is no longer a threat”, the Commissioner said at the University of Athens, during his trip to the Greek capital, where he met Prime Minister Alexis Tsipras, and the Greek finance minister, Euclide Tsakalotos.
The Greek government and the European Commission described as exaggerated and unfounded the calls of the IMF for the adoption of new budgetary measures to comply with the trajectory laid down: a primary budgetary surplus (not including servicing the debt) of +3.5% of GDP in 2018 and beyond (see EUROPE 11724, 1725).
In order for it to participate financially in the third Greek bailout plan, the IMF must take the view that the Greek government debt is viable. According to the Commission, this will still be the highest in the whole EU compared to GDP in 2017, but it is then expected to fall again, from 179.7% to 177.2%, as a result of a return to strong growth that has been put at +2.7% of GDP. The IMF believes that growth in Greece will be drop by more than half this year.
The European countries that are among the creditors of Athens steadfastly want the IMF to come on board, but reject its calls for a substantial relief of the Greek debt. In the Dutch daily newspaper Financieele Dagblad, the President of the Eurogroup, Jeroen Dijsselbloem, said that Greece would default on its debt unless the IMF joined the third bailout plan, whilst stressing that those in favour of Grexit were overlooking the economic and political shock that such an event would cause. (Original version in French by Mathieu Bion)