European Commissioner of Economic Affairs Pierre Moscovici is arriving in Athens today (Tuesday) to ensure that the Greek government is on track regarding the progress of reforms required by the bailout program.
The second omnibus bill that includes prior actions will go on vote in the Greek Parliament on Thursday. Legislating the prior actions opens the way for the disbursement of 2 billion euros in financial aid and is a necessary step towards the completion of the first evaluation by lenders.
The results of the Greek banks stress tests conducted by the European Central Bank and the Single Supervisory Mechanism show that Greece’s four major lenders need 14.4 billion euros in capital.
The ESM has allocated 10 billion euros for Greek bank recapitalization since August 14. In August it had been estimated that Greek lenders would need 25 billion euros in capital. Now efforts will be made to cover the 4.4 billion without resorting to the remaining 15 billion euros originally estimated.
Moscovici will stress that bank recapitalization and the first program evaluation are inextricably linked. He will also convey to the Greek government the creditors’ concerns on whether the actions legislated are also implemented in practice. The commissioner will also stress that legislation and implementation of reforms should be completed within the given time frame.
The European commissioner will discuss with the finance and labor ministers the hot issues of security fund restructuring and non performing loans. He will stress that the Greek proposal should match what has been agreed on. He will also reiterate that the European Union will discuss Greek debt restructuring only after the first evaluation is completed successfully.
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