Eurogroup pours cold water over Greek hopes of debt relief

New Europe — Progress is needed on Greece’s reform to keep the International Monetary Fund’s participation in the programme, Eurogroup President Jeroen Dijsselbloem said ahead of a meeting in Brussels on Monday.

He also noted that the medium-term measures for Greece’s debt could not be made specific at present.

“For December 5 I think it is important to make as much progress as possible so that the IMF has as much clarity as possible on a number of reforms, on the fiscal trajectory for the coming years. And, of course, the next step will be for the IMF to go to their board before the end of the year. That is my purpose for the 5th of December,” he said.

At the same time, Dijsselbloem ruled out any further commitment on possible medium-term measures on Greece’s debt for the present.

“The May agreement had listed a number of possible measures for the medium term but the extent to which they will be necessary was impossible to determine right now,” he said.

“And that was also understood by the IMF in May, when we said that we can only put a figure on it when we are in the second half of 2018,” Dijsselbloem said.

Asked whether an agreement on Greece can be ready by the next Eurogroup meeting, he declined to give a firm reply, noting that the institutions had yet to brief the Eurogroup on the progress made so far.

Wolfgang Schaeuble told reporters at the Eurogroup meeting that the Eurozone has agreed on measures to shield Greece from interest rate increases but there would be no further concessions until the current assessment of its bailout conditions has ended.

German, Dutch and French governments are now pushing the decision for fiscal loosening further down the timeline so that Greece does not become an issue in their election campaigns.

This comes as a blow to embattled Prime Minister Alexis Tsipras who had hoped to offer Greek people some hope. In May, the Eurozone had agreed to find ways to offer Greece relief, however, despite strides in Greek reforms with privatizations, pension slashes, disability fund cuts and massive overhauls to Greece’s public sector.

For Athens the choice is either harsher austerity, if the IMF decides to participate in the programme, or the prospect of Germany blocking the continuation of the bailout aid which is used to repay Greece’s debts if the IMF pulls out.

In either case it would seem that there is no prospect of discussions for lightening the country’s debt burden before the end of 2018.

And even then the choices are between a watered down form of lower interest rates and extending the repayment term on the growing debt of Greece which at the moment amounts to 170 % of GDP, and a fourth bailout programme