The attendees of the meeting of the Eurogroup held in Sofia (Bulgaria) on Friday 27th April welcomed the progress made by the Greek authorities in setting in place the socio-economic measures provided for by the fourth monitoring mission of the third and final bailout plan and the long-term growth strategy presented in Sofia the same day by the Greek finance minister, Euclide Tsakalotos.
Mário Centeno, the President of the Eurogroup, welcomed the fact that Greece remains “fully committed” to the implementation of the 88 socio-economic measures still necessary to conclude the fourth monitoring mission (see EUROPE 11973) before it exits the bailout plan in mid-August. However, as Pierre Moscovici, the Commissioner for Economic and Financial Affairs, said, there are still a few subjects to discuss, as the work is not yet completed.
European creditors to return to Athens in mid-May. The institutional teams (European Commission, ECB, ESM plus IMF) will return to Athens on 14 May to take stock of the implementation of these reforms. An agreement in principle at technical level ('staff-level agreement') between the 'institutions' and Athens on the conclusion of this final monitoring mission is hoped for by the end of the visit.
“We need to speed up and intensify the work”, Moscovici however warned, in a message to all parties. “The coming weeks will be extremely intense”, added Klaus Regling, the director general of the European Stability Mechanism (ESM).
In Sofia on Friday, Tsakalotos presented the Greek long-term growth strategy, which was welcomed by the Eurozone financial policymakers. Moscovici welcomed the fact that it covers a broad range of issues, such as “productivity, enterprise, financing conditions”. “The effort must be continued over time”, he added.
Concerning the plank of post-bailout plan measures, the decisions will be made at the Eurogroup meeting of 21 June, once it has been noted that the Greeks have set all of the required reforms in place.
If a post-plan supervision framework is set in place, its outlines have not yet been sketched out. But it will look nothing like a new programme, Moscovici said, repeating comments he has previously made on the subject (see EUROPE 11942).
Athens' creditors are seeking to maintain leverage that would allow them to continue adequately to monitor developments in the Greek economy. The primary budgetary surplus (not including servicing of the debt) stood at 4.2% of GDP in 2017. According to a Eurogroup decision of June 2017, Athens must in any event maintain this primary budgetary surplus at 3.5% of GDP a year up to 2022 and an average of 2% between 2022 and 2060 (see EUROPE 11810).
Measures to relieve the Greek debt are a prerequisite for specific financial support from the IMF. Work on the 'French mechanism', to index the level at which the Greek debt is repaid to the country's economic growth ('growth-adjustment mechanism'), is continuing a technical level (see EUROPE 11944). At the end of 2017, Greek debt stood at 178.6% of GDP. (Original version in French by Lucas Tripoteau)