On Monday 4 December, the Eurozone finance ministers expressed their support for the technical agreement between Athens and its institutional creditors (European Commission, European Central Bank, European Stability Mechanism), as reached on Saturday 2 December, a necessary stage for the conclusion of the third monitoring mission of the third bailout plan.
Upon his arrival at the Eurogroup, Jeroen Dijsselbloem, the current president of this informal meeting, said that he was “very happy” with the agreement, which he described as “quite exceptional”, given the time taken to conclude it.
Amongst other things, the agreement provides for the Greek authorities to set prior measures in place to finalise this third monitoring mission. The government of Alexis Tsipras needs to submit more than 100 proposed economic and social reforms to the Vouli (Greek parliament) by mid-January. According to one European source, around 30% of the reforms have already been actioned by the Greek public authorities. The measures under consideration should not, however, bring about any extra cuts to salaries and pensions, according to the Greek newspaper Ekhathimerini. Under the agreement between the parties, the Greek state also undertakes to sell four lignite-fired electricity power stations.
Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, welcomed the fact that “the Greek authorities plan to implement the prior actions needed to complete the third review as soon as possible”.
Readers may recall that the Greek authorities need to have adopted the measures in question before the meeting of the Eurogroup on 22 January of next year, in order to obtain a definitive political agreement on this mission and for the European Stability Mechanism (ESM) to unlock a tranche of aid in February (see EUROPE 11917). However, Dijsselbloem has declined to confirm the amount or terms and conditions of this tranche, as this point will be discussed in January.
The various stakeholders are therefore aiming for a clean exit from the third bailout plan, which will end in August 2018 (see EUROPE 11870).
Short-term debt relief. On the same day, the ESM also announced that it had implemented measures to relieve the Greek debt in the short term for the year 2017, even though it formally adopted these measures on 23 January of this year (see EUROPE 11709). Currently, the ESM believes these measures will represent a reduction of the Greek debt by 25% in relation to national GDP up to 2060 (compared to 20% one year ago) and a 6% reduction in gross financing needs (compared to 5% one year ago). (Original version in French by Lucas Tripoteau)