Eurogroup president Mario Centeno has said that the target for Greece is to reach a staff-level agreement with creditors before the 24 May meeting of the Eurogroup.
That gives Athens less than two weeks to complete the remaining 85 of the 88 preconditions for completing the bailout evaluation. These include completing the outstanding privatisations, proceeding with the reform of public administration and meeting targets for bad bank loan recovery.
The completion of the evaluation, Centeno said, is a necessary condition for the 21 June Eurogroup to take all the decisions necessary to ensure Athens’ successful exit from the fiscal adjustment programme in August and a precondition for Greece’s creditors to decide concrete debt relief measures, how the country’s debt load – currently equivalent to 180 percent of GDP – can be reduced, delayed, or otherwise recalculated..
“[In the previous meeting] we exchanged views on some key elements to support the successful exit of Greece from the programme. The Greek Minister presented the growth strategy of Greece for the coming years, which aims to boost Greece’s long-term growth potential and enhance the investment climate.”
“We also discussed how we can further support the Greek authorities in their continued reform efforts in the years after the programme. We took note of the intention of the Greek government not to request a successor arrangement” – a precautionary credit line which can be used in case loans cannot be obtained in the money market – which in EU jargon constitutes a “clean exit”.
Already Luxembourg’s finance minister Pierre Gramegna expressed his support for Greece, saying that the country has fulfilled all the demands made of it by its creditors following a series of reforms made in recent years. Greece hopes will be a post-exit plan for substantial debt relief following eight years of near constant crisis fighting.
Europe is keen to see a successful exit for Greece from a bailout program instituted by the eurozone and International Monetary Fund as they can then boast that the austerity and internal devaluation programmes were successful, despite the fact that Greek debt is now much higher than it was at the beginning of the crisis.
The conclusion of the Greek programme then could close what has been a rough chapter in the bloc’s history that at various stages had threatened the future of the entire euro project.
But the end of the programme and the clean exit will not be the end of supervision for Greece which has once again become the guinea pig for the kind of controls austerity-obsessed Europe wants to impose on all the member states.
Surveillance for Greece will be stricter than for countries like Portugal and Ireland – because Europe can – or for other countries that exceed the EU budget limits – because in their case Europe can’t – and will include regular audits, linked to continuing fiscal discipline from Greece’s end, possibly with automatic measures and penalties voted in advance if targets are not met.
And this is by no means a condition that applies exclusively to Greece or the other member states that came out of a bailout programme. The same situation applies to other countries where Europe feels they can enforce the Germany-inspired rules of the Growth and Stability Pact. For example, on Italy, where the EU is worried about the possibility of an anti-austerity (populist) government rejecting the automatic increase in sales taxes that would be triggered because of missed deficit targets the previous government agreed under the SGP.
Are we, when looking at the case of Greece, seeing the future of Europe?