Greece’s negotiations with creditors on the third bailout package will start on Tuesday in Athens with the European Union seemingly ready to ask for more prior actions before any disbursement of funds.
The Greek government denies there will be any more reforms required by creditors before the much-needed cash is released. The two omnibus bills that passed in the Greek Parliament are all that is needed for the first loan tranche, Greek officials say.
However, creditors say that the prior actions the Greek Parliament voted was just for starting the negotiations. For fund disbursement, more actions might be needed.
Several Eurozone countries insist that more prior actions are needed before Greece receives any of the 86 billion euros the three-year bailout package is estimated at.
At the same time, Athens is not clear yet whether the creditors’ monitoring team will have full access to Ministers and state facilities. Officially, the Greek government states that the creditors’ technical teams will only have access to the General Accounting Office and not in pertinent Ministries and that only middle-level officials will discuss with creditors in the beginning.
However, the European Commission, the European Central Bank (ECB) and the European Stability Mechanism (ESM) expressed the concern that the delays in negotiations might not allow for signing the agreement by mid-August.
Greece has a substantial 3.2-billion-euro payment due to the ECB for maturing state bonds on August 20. The Greek government might not be able to pay if bailout funds are not disbursed by then.
“This, at present, is the big, fat issue,” a European official involved in the talks told The Financial Times. “They do not want to understand that there will be yet another significant package of ‘prior actions’ before any disbursement. They already have implementation fatigue after two mini-bills.”
The issue of the participation of the International Monetary Fund (IMF) in Greece’s third bailout is still open. Greece made an official request on Friday, but the IMF is reluctant whether to continue giving financial aid to Greece when its official reports say that the Greek debt is unsustainable.
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