By N. Bellos
[email protected]
A Eurogroup meeting considered as crucial for the Greek program and the bailout-dependent country’s economic recovery began at 14.45 GMT in Brussels on Monday, with initial indications pointing to a “marathon” session.
The increasingly unpopular Tsipras government, days after passing the latest austerity package through Parliament, is desperately seeking a positive nod from creditors for immediate medium-term debt relief measures. Conversely, European creditors are waiting for the IMF’s decision on whether it will rejoin the Greek bailout as a lender, which for many EZ member-states is a mandatory condition for continuing the program.
Eurogroup chairman Jeroen Dijsselbloem told reporters before the session that Europeans are awaiting the Fund’s commitment that it will rejoin the program, with all efforts extended towards this direction.
In the face to standing German opposition to an immediate opening of the “Greek debt debate”, EU Commission Pierre Moscovici was joined by new French Economy Minister Bruno Le Maire on Monday in pushing for a “comprehensive agreement” that will include the debt issue.
Despite prior reports of a “no show”, IMF Europe director Poul Thomsen was in Brussels for the Eurogroup meeting, where he’s expected to stand by the Fund’s position, i.e. medium-term debt relief measures in exchange for the IMF rejoining the Greek bailout.
Earlier, an EU source said an extraordinary Eurogroup meeting within the next few days is a distinct possibility if Monday’s session fails to hash out a comprehensive agreement.
In terms of the actual agenda at today’s Eurogroup, EZ member-states’ finance ministers will first decide if the latest measures and reforms passed by the Greek government fulfill prior actions demanded by creditors. The “green light” by the Eurogroup will be a formality if the EWG has submitted a positive compliance report.
The second and equally crucial issue on the agenda deals with the period in which the Greek state must post annual primary budget surplus targets of 3.5 percent (as a percentage of GDP), with indications at press time pointing to at least 2022.
The level of fiscal goals demanded from Greece for after 2022 remains a point of contention between the IMF and European creditors, with the former pressing for what it calls “realistic” targets of under 2 percent of GDP.
The variable entailed in future primary budget surplus goals is expected to weigh heavily on any prospective agreement for debt relief, a prospect based on a Eurogroup decision dating from May 2016. As such, if the current obstacles are cleared and all creditors agree, specific debt relief measures will be implemented only after the current bailout ends (midway through 2018) and only after the country fully meets its (third) memorandum commitments.
Another variable in the “mix” is the fact that scheduled elections in Greece will be held in 2019, meaning that another government will possibly be shackled to measures, fiscal targets and commitments agreed to in the present.
