Lowering the Greek debt may begin only if three conditions are met first, stated Eurogroup president Jeroen Dijsselbloem at the end of yesterday’s meeting in Luxembourg.
The three conditions include completing the prior actions, achieving a primary surplus and assessing that debt relief is necessary. Regarding last issue, European Commissioner for Economic and Monetary Affairs, Olli Rehn noted that the decisive factor in assessing the Greek debt’s viability is the country’s growth index.
Dijsselbloem said that new Greek Finance Minister, Gikas Hardouvelis, informed the Eurogroup that the Greek authorities would meet the first six prior actions by the end of June, in order to secure the disbursement of the next loan tranche, worth 1 billion euros. He added that he was reassured by Hardouvelis that the new secretary-general of public revenues would be chosen with “transparency”.
European Stability Mechanism managing director, Klaus Regling, reiterated that the 2 billion euros (the next two tranches of Greece’s loan) would be disbursed to Greece after the prior actions were completed, adding they had not yet been so. The European Financial Stability Facility has disbursed 139.9 billion euros to Greece so far, he said, which left 3.8 billion euros outstanding.
International Monetary Fund (IMF) managing director, Christine Lagarde, who also attended the meeting, said that it was necessary to establish the amount the Greek banks would need for their recapitalization. The IMF needs to know which percentage of the 10 billion euros available for the recapitalization would be needed, in order for the Fund “to complete Greece’s financing needs.”
The Eurogroup president said on the same issue that the amount should be determined during the Troika of Greece’s lenders current (fourth) review of Greece’s fiscal adjustment program, in order to allow the fifth review to begin after the end of the summer. “We still have work to do,” he commented.
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