The strategy for growth in Greece, to be presented by the Greek government in April, is a “major credibility test” that will set the tone for the forthcoming discussions on the finalisation, in mid-August, of the third bailout plan, the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, said after the meeting of the Eurogroup on Monday 12 March.
The Greek government coalition, which is led by the far-left movement Syriza, is determined to make the point that Greece will be its own master from mid-August, when it comes out of eight years of financial tutelage. Having been overtaken in opinion polls by the Christian Democrat Party New Democracy, it intends to take measures to promote jobs and provide relief for the sectors of society that have suffered most in the crisis, in the run-up to the national elections of 2019.
In any event, Athens will have to stick to the target of a budgetary surplus of 3.5% of GDP for several years after the end of the third bailout plan. The post assistance budgetary surveillance plan will not be a fourth bailout plan by a different name, Moscovici has made clear several times.
In Sofia at the end of April, the Eurogroup will discuss a fledgling mechanism aiming to adjust debt repayments to growth levels in Greece. “The aim here would be to recalibrate the profile of Greece's EFSF loans to adjust future debt repayments the group performance to ensure debt sustainability”, said President Mario Centeno. Discussions on relieving the debt, to follow the bailout plan, are still conditional on the adoption of 88 prior measures in the framework of the fourth and final monitoring mission of the aid plan, he stressed.
The permanent bailout fund of the Eurozone, the European Stability Mechanism, will pay out a first sub-tranche of €5.7 billion to Athens in the second half of March, in line with the decisions made in the framework of the third monitoring mission (see EUROPE 11976). (Original version in French by Mathieu Bion)