The Eurozone finance ministers were hoping to achieve a political agreement on Greece, during the evening of Monday 22 May, despite differences of opinion between the various parties on the question of debt relief for the country.
No political agreement had been reached at Eurogroup on the finalisation of the second monitoring mission of the third Greek bailout plan as we were going to press on Monday evening . However, all partners were united in their hopes of reaching a political agreement by the end of the meeting, as illustrated by the declaration of the new French Minister for the economy and Finance, Bruno Le Maire, upon his arrival: “I hope that we will do good work today to reach an agreement”. “Everybody wants to reach this agreement”, confirmed the Economic and Financial Affairs Commissioner, Pierre Moscovici.
Although the political will on the part of the Eurogroup ministers and the IMF appears genuine, the question of debt relief for the Hellenic Republic is still a problem. Readers may recall that the IMF has made its participation in the bailout plan conditional on relief measures for the Greek debt, on which Germany is reluctant to make any promises just at present, a few months ahead of their general election (see EUROPE 11792). “To be quite honest, the starting positions are quite a long way apart”, Le Maire confirmed.
A political agreement rather than a final agreement
If any agreement can be reached at this meeting at all, it will not be a final one, said Jeroen Dijsselbloem, the President of the Eurogroup. Upon his arrival, he said that he hoped for and was working on an agreement today, but that this would not be the final agreement. “We have always said that the final and concrete decision on the debt relief measures would come at the end of the programme, next year”, he added. Even so, the leaders are hoping for a political agreement to satisfy all involved and to commit to finalising this monitoring mission.
To conclude this mission, the government of Alexis Tsipras has committed to a raft of budgetary consolidation measures equivalent to 2% of GDP, which was voted through by the Greek parliament on the night of Thursday 18 to Friday 19 May. Aside from the question of debt relief, Greece's budgetary trajectory after 2018 has also still to be decided upon, but it appears that Greece and the 'institutions' (European Commission, ECB, IMF and ESM) have agreed on a primary budgetary surplus (not including servicing the debt) of 3.5% of GDP up to 2021 (see EUROPE 11784).
From Greece's point of view, finalising this monitoring mission is essential in order to unlock the aid envelope required to face a reimbursement peak of more than €7 billion to the ECB in July. (Original version in French by Lucas Tripoteau)