In Valletta on Friday 7 April, the Eurozone finance ministers will again discuss the ongoing negotiations between Athens and its institutional creditors in the framework of the third Greek bailout plan, but no political decisions are anticipated in April.
"No significant decision is expected" in Valletta, a European source confirmed on Tuesday 4 April, adding that it is still the same political hurdles - tax and pensions reform, privatisation of the electricity sector - that are blocking the finalisation of the second monitoring mission of the third bailout plan, although talks have intensified since the last Eurogroup meeting (see EUROPE 11749).
This senior official warned against procrastination that would postpone the work on an agreement until after July, with Greece facing a reimbursement peak of more than €6 billion this summer, or even until after the German general elections at the end of September. It would be "unproductive and pointless" to speculate on the possibility of missing the July deadline, as this would be "extremely harmful" to Greece's incipient recovery and the confidence of economic players, the source stressed.
Once an agreement has been reached at technical level on the measures the Greek government must apply to honour its budgetary commitments (primary surplus of 3.5% of GDP) in 2018 and beyond, the ministers will have to decide for how long and at what level Athens must maintain a budgetary surplus and discuss medium-term relief measures for the Greek debt to apply in mid-2018.
We cannot ask Greece to keep a high budgetary surplus "for years and years", as this would penalise growth, Economic and Financial Affairs Commissioner Pierre Moscovici told a European Parliament hemicycle that was particularly ill-disposed towards Athens' creditors. He said that there would be talks between the Greek government and the institutional creditors' representatives during the evening in Brussels, with the Valletta meeting aiming simply to measure how far they have come since February.
On the employment market reforms, he reiterated the Commission's commitment to the European social model, supporting the re-establishment of the effective collective bargaining systems in line with European best practice. He called for more competition on the energy market "in the interests of all consumers", in reference to earlier court rulings.
Finalising the second monitoring mission of the third bailout plan would allow Greece to repay some of its payment arrears and benefit from the ECB's quantitative easing operation to buy back public debt instruments, which is critical for an easier landing out of the bailout plan in mid-2018.
Eurogroup Presidency. The question of the presidency of the informal body of Eurozone ministers is reported to have been left off the agenda of the Valletta meeting. The situation of its current president, Jeroen Dijsselbloem, has become untenable (see also other article) after his divisive and sexist comments and due to the fact that he is not expected to feature in the next 'Rutte' government.
The ministers will be briefed on the completion of banking union in the Eurozone at a session to be attended by the presidents of the Single Supervision Mechanism (SSM), Danièle Nouy, and the Single Resolution Board (SRB), Elke König. The former will report on non-performing loans and the latter on the banking sector's contributions to the European Resolution Fund and the state of preparation of the resolution plans by the EU banks.
They will not, however, discuss the creation of a backstop to ensure sufficient resources for the Single Resolution Fund at all times.
Lastly, ahead of the spring meetings of the IMF and the World Bank, the Eurogroup will discuss recent developments in exchange rates. It will be briefed on the latest ex-post monitoring mission on the Cypriot bailout plan (see EUROPE 11760). (Original version in French by Mathieu Bion)