By E. Sakellari
[email protected]
The European Commission will announce details for Greece’s post-memorandum supervision on July 11, as the former will assume the role of chief auditor of institutional creditors after Aug. 21, 2018 and until 2022.
The development, in fact, dominated talks between EU Commissioner Pierre Moscovici and Greek leadership during the latter’s visit to Athens on Tuesday.
As repeatedly cited over the past year or so, auditors of all four institutional creditors (Commission, IMF, ECB and the ESM) will conduct quarterly reviews until 2022, especially on whether this and the next Greek government is fulfilling post-bailout terms.
Moreover, each quarterly review will be accompanied by a report, expected to be closely dissected by money markets in order to gauge the country’s economic health.
The quarterly reports, two of which will be more extensive and binding, will also be linked with the disbursement of 4.8 billion euros in savings from medium-term debt relief measures – 1.2 billion euros per year for four years – recently extended to Greece.
Next up on the horizon is a 600-million-euro tranche, emanating from the June 21 Eurogroup decision, with all indications pointing to a December 2018 disbursement, as long as Athens meets its post-memorandum commitments.
The 1.2 billion euros Greece per year is set to receive for the next four years is divided into one billion euros from the return of profits generated by Greek bonds (ANFAs adn SMPs) held by European central banks and 200 million euros representing the savings from abolition of a step up interest rate that had been linked with loans allocated in the second memorandum package (EFSF).
The 4.8-billion-euro “windfall” is expected to cover short-term maturities – i.e. the more “expensive” debt in the Greek portfolio – or for much-needed investments.
