The President of the Eurogroup Jeroen Dijsselbloem estimated that the upcoming Greek bailout program review will take months, rather than weeks. Mr. Dijsselbloem told journalists in Amsterdam that “we need to be realistic” and that “I would have liked to speed up the process but unfortunately that is not within my capacity”.
In order to complete the review, the critical reform of the Greek social security system must be carried out, while an agreement must be reached on the new privatization fund and a number of additional, as-yet-unresolved, fiscal matters for 2017-18. Only after the review concludes can the Eurogroup convene to debate further the disbursement of financial aid towards Greece and to initiate talks on debt relief.
However, the Dutch finance minister added that he has yet to see the Greek pension reform proposal, beyond what has been mentioned in the media. He was also adamant on the International Monetary Fund’s participation in the Greek program, “not just as a technical consultant”, but also in financing.
Greece’s loan obligations for the first three months of 2016 amount to 4 billion euros. They include repayments to the International Monetary Fund, bond maturities and interest.
The next tranche expected from Europe is 5.7 billion euros.
The Greek government was hoping that the evaluation would be completed by mid-February and that if Athens gets a positive mark, the disbursement of the tranche will be unlocked and the government will not have any problems.
However, if negotiations with creditors are prolonged, the funds will not be disbursed on time and the Greek government might have to repeat what it did last year, tapping into public organization funds. These organizations have reserves of about 15 billion euros at the moment.
Greece’s total loan obligations for 2016 amount to 13.7 billion euros, when in 2015 they were 25.5 billion euros. The “hottest” month regarding financial obligations is July, when Athens has to pay a total 3.7 billion euros to the IMF, the European Central Bank and interest.
