Tuesday

19th Mar 2024

Euro-ministers and IMF in third attempt to agree on Greece

Eurozone finance ministers and International Monetary Fund chief Christine Lagarde are having a third attempt on Monday (26 November) to agree on how to keep Greece afloat and unblock its long-awaited bailout tranche.

At the core of the debate is how to decrease Greece's debt from 190 percent of GDP to 120 percent over the next eight to ten years and how to bridge a multi-billion-euro funding gap that has emerged due to worsening recession and political delays.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Third time lucky? Greece awaits the international creditors to unblock its bailout money (Photo: asterix611)

The IMF insists eurozone governments should accept losses on their Greek loans - so-called Official Sector Involvement (OSI). Germany and a few other countries have argued against saying that as long as the current bailout programme is ongoing, it would be against national and EU law to give loans and at the same time accept losses.

But since the programme ends in 2014, there would be no legal impediment for OSI the following year. According to the German newspaper

Welt am Sonntag, ministers discussed this option last week during a secret meeting in Paris one day ahead of a second Eurogroup which ended in disagreement.

Der Spiegel on Monday also reported that both the IMF and the European Central Bank - Greece's other creditor - are still insisting governments give up half of their Greek claims.

Germany continues to oppose this option. Instead it wants to shift the attention to the "immediate" funding needs - the disbursement of the tranche and filling the funding gap through a bond buying scheme possibly funded by the eurozone bailout fund to the tune of €10 billion.

Lowering the interest rates on the Greek loans is also on the table, but that would raise the question of why other bailed-out countries - Ireland and Portugal and Spain for its banking sector - have to pay more.

"I'm against this write-off and I want to find another solution," German Chancellor Angela Merkel said Friday after an EU summit dedicated to EU budget talks.

Ministers and the IMF are under high pressure to agree, as the Greek government is losing credibility after forcing through highly unpopular spending cuts only to see its bailout tranche further delayed by quarrels among creditors.

Greek Prime Minister Antonis Samaras on Friday said his EU peers during the summit had recognised it is no longer "Greece's fault."

“We now have some strong supporters. The talks will go on right up to the last minute (on Monday)," he said.

A total of €44.5 billion are to be disbursed by the end of the year, if the Eurogroup agrees on Monday. Preparatory talks took place on Saturday, with ministers sounding cautiously optimistic afterwards.

"I think that in effect we are very close to a solution," French finance minister Pierre Moscovici told BFM television on Sunday. "I don't know if there will be an agreement tomorrow, I know it is possible and I want on," he said.

A third failure to agree would be "irresponsible, given the efforts everyone has made," he added.

One EU source told this website that there will most likely be a deal for the disbursement of the tranche, but the language would be "incomprehensible" and any debt restructuring deal would not be publicly announced.

Greece in limbo after bail-out talks fail

Eurozone finance ministers will reconvene next week after failing to reach a deal on whether to release the next tranche of Greece's multi-billion euro loan programme.

Latest News

  1. Borrell: 'Israel provoking famine', urges more aid access
  2. Europol: Israel-Gaza galvanising Jihadist recruitment in Europe
  3. EU to agree Israeli-settler blacklist, Borrell says
  4. EU ministers keen to use Russian profits for Ukraine ammo
  5. Call to change EIB defence spending rules hits scepticism
  6. Potential legal avenues to prosecute Navalny's killers
  7. EU summit, Gaza, Ukraine, reforms in focus this WEEK
  8. The present and future dystopia of political micro-targeting ads

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us