In the best-case scenario, the finance ministers of the countries of the Eurozone will make a decision, on Monday 20 February, to send the experts of the 'institutions' (European Commission, ECB, IMF, ESM) back to Athens to try to finalise the second monitoring mission of the third Greek bailout plan.
“The maximum we can expect on Monday” is that Greece and its institutional creditors agree on the preconditions for a return of the country's creditors' experts to the Greek capital, a senior European diplomat said on Thursday 16 February. He went on to say that the two main issues still outstanding are the budgetary prospects in Greece and the question of the employment market.
The Greek government, which is refusing to adopt budgetary measures for a single euro more, argues that the IMF's demands, which are based on more pessimistic growth and consolidation forecasts for the Greek public finances than those of the Commission, are without foundation (see EUROPE 11726, 11724). Another open question is the scale and duration of the primary budgetary surplus (not including servicing of the debt) that Athens will have to stick to after 2018, the year it comes out of the third Greek bailout plan. The Greek government also wishes to reinstate the collective agreements in Greece, an element not much to the liking of the IMF (see EUROPE 11722). However, the Europeans do not anticipate that the IMF will come on board with the third Greek bailout plan.
The same source went on to say that the Greek government had carried out only a third of the prior actions necessary for the second monitoring mission of the Greek plan to be finalised.
At this stage, there is no urgent need to finalise the second mission of the Greek aid plan, as Greece will be able to keep its head above water financially until the summer, when there will be a repayment peak of more than €6 billion in debt instruments. Even so, Athens hopes for stability that will allow it to return to strong levels of growth in 2017 (+2.7% of GDP) and to qualify to come under the shield of the ECB via the quantitative easing operation, to ease its return to the long-term debt financial markets. Additionally, the forthcoming elections in certain countries, such as the Netherlands in mid-March, whose national parliament must give its consent to trigger the payment of a new tranche of aid, could see the Greek tragedy being taken hostage. Feelings are already running high in Germany, where certain parties have caused the spectre of Grexit to resurface.
“It is preferable to agree sooner than later instead of waiting, waiting, waiting”, the senior diplomat told us, although he does not see the need to call an extraordinary meeting of the Eurogroup.
Economic situation in the Eurozone. On Monday, the ministers will hold a broader discussion on the economic situation at Eurozone level, on the basis of the recent winter forecast of the European Commission. It has adjusted its growth forecasts upwards slightly, now predicting that GDP will increase by 1.6% in 2017 and by 1.8% in 2018 for the Eurozone (see EUROPE 11724). (Original version in French by Mathieu Bion)