Skip to main content

Top EZ official: 2nd review of Greek program by Monday remote; late Dec. target

By N. Bellos

A top Eurozone official on Wednesday predicted that a comprehensive agreement for the ongoing Greek program is possible by the end of the year, but increasingly difficult by the scheduled Dec. 5 Eurogroup meeting.

The same official said whatever delay is primarily due to “internal disagreements” between creditors, essentially pointing to the IMF and Berlin.

As such, the possibility that a second review of the Greek program (third bailout) will be achieved by Monday appears remote, given that all of the creditors — including the IMF — must sign off on the review. The Fund appears adamant over its disagreement with the (high) level of primary budget surplus targets imposed on Athens after the current bailout ends, in mid 2018.

In a more ominous prediction, the same top official said an agreement at the staff-level between creditors and the leftist Greek government on labor sector liberalization is also unlikely by Monday, which means that Eurogroup finance ministers will find the matter on their agenda.

As “N” has previously reported over the past two weeks, differences over the size of an expected “gap” in the 2018 are negligible, with a compromise expected.

Conversely, in a bid to interject the positive, the official expressed optimism that an agreement will be reached by the end of the year, citing major progress made so far and close cooperation with Athens.

Turning to the other major topic of the month, as far as Athens is concerned, he said short-term debt relief will be discussed at the Eurogroup on Monday, but not medium- and long-term measures.

“… because the effect of short-term measures on the debt must first be calculated.”

Returning to the issue of primary budget surplus targets, the official reminded that the Fund is insisting on a goal of below 3.5 percent of GDP after 2018. European creditors want the target at the high 3.5-percent figure for more than two years after 2018.