On Monday 20 March, the finance ministers of the Eurozone will once again take stock of negotiations leading towards the finalisation of the second monitoring mission of the third Greek bailout plan, but a political agreement on this is no longer expected before May.
The positions of the 'institutions' representing Athens' creditors and the Greek government remain “quite a long way apart on a number of issues”, a senior European diplomat said on Thursday 16 March. He explained that political considerations are hindering any breakthrough in negotiations at this stage, whilst an agreement at technical level on the measures to be adopted by Greece in exchange for a further tranche of financial aid may be secured fairly soon.
A political agreement allowing the second monitoring mission of the Greek bailout plan to be signed off is not even looking likely before the meeting of the Eurogroup in Valetta on Friday 7 April. “April will be a complicated month”, the same source added, explaining that the spring meetings of the IMF and the World Bank, which will not be without relevance for these negotiations, will be held at the end of it. Greece is in a position to finance itself until July, when it will face a further repayment peak of more than €6 billion.
The Europeans have accepted the IMF's request calling upon Greece to reform its pensions system, employment market and income tax system (reducing the taxation threshold in parallel to more progressive taxation) (see EUROPE 11729). This is a condition imposed by the IMF for its financial participation in the third bailout plan that has still not been ticked off. These reforms, which the radical left-wing Greek government is currently struggling to accept, would be set in place with a view to coming out of the bailout plan in order to guarantee compliance with the target laid down of a primary budgetary surplus (not including servicing of the debt) of 3.5% of Greek GDP after 2018. If, as the Europeans believe, the medium-term benefit to the Greek public finances is greater than this 3.5% level, the additional budgetary surplus achieved could be used to take measures to promote growth.
On the European side, there is acknowledgement that progress has been made in the area of taxation and on the out-of-court settlement of disputes. However, in addition to problems related to the required reforms referred to above, negotiations are continuing to stumble over privatisations in the electricity sector.
2017 budgets. The Eurogroup will adopt a statement on the implementation of the national budgets with regard to the Stability and Growth Pact. By and large, nothing has changed since the last discussion, which was held at the end of January, the diplomatic source explained (see EUROPE 11713).
Lastly, the ministers will also hold an exchange of views on the sustainability of the pension systems. (Original version in French by Mathieu Bion)