The looming June 21 Eurogroup meeting has now emerged as the most crucial setting for decisions on Greek debt relief and the scope of creditors’ supervision after the ongoing bailout ends in August 2018.
According to well-informed sources who spoke to “N” in the wake of a staff-level agreement, announced on Saturday afternoon, negotiations must be completed by the specific Eurogroup meeting, given that the Parliaments of several Eurozone member-states, including Germany, end their sessions in late June.
The staff-level agreement between the leftist-rightist Greek coalition government and creditors’ top auditors to conclude the fourth review of the current – and last – memorandum program (bailout) will be up for approval at a Eurogroup meeting next week – the one before the June 21 meeting.
As previously reported, at least four basic options have been repeatedly described as medium–to-long-term debt relief to be extended to Greece by institutional creditors, including:
– A prominent French proposal whereby debt repayment is linked to annual economic growth. For instance, maturities will be “bumped” to the future if Greece’s annual GDP growth does not exceed 3 percent.
– Repayment of IMF loans extended with a higher interest using ESM loan money left over from the third consecutive bailout (July 2015), and calculated at 27 billion euros.
– A return of profits generated by bonds that avoided the PSI “haircut”, calculated at five billion euros over a five-year period.
– Giving the country a grace period of up to 15 years from amortization payments.
The possible “road maps” until the end of June will more-or-less be discussed at next week’s Eurogroup meeting, which is expected to ratify the staff-level agreement.
Among others, the poll-trailing Tsipras government must:
– Implement all remain “prior actions” foreseen in the fourth review by the end of June 2018, including energy sector liberalization.
– Use one billion euros disbursed as a sub-tranche, expected on June 15, to cover the state’s arrears to the private sector.
