Wednesday

13th Dec 2017

EU to drip-feed Greek treasury

  • Greek finance minister Euclid Tsakalotos (r) with European Stability Mechanism chief Klaus Regling (l). Since the start of the programme last year, Greece has received €28 billion.

Eurozone finance ministers gave their green light on Monday (10 October) to the disbursement of a €1.1-billion tranche of aid to Greece, but said they would wait before releasing another €1.7 billion.

Ministers meeting in Luxembourg took the decision after the European Commission said it considered that the Greek government had fulfilled all 15 requirements to close the so-called first review of the bailout programme launched last year.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

They said that they would wait until the publication of the latest data on clearance of net arrears, due later this month, before authorising the release of the €1.7-billion sub-tranche of aid.

"Greece has made a tremendous job to complete the milestones of the first review,” EU finance commissioner Pierre Moscovici said.

The EU commission's assessment of the latest legislation passed in Athens last week was completed at the last minute, a few hours before the Eurogroup meeting.

The decision to release the €2.8 billion come after a €7.5 billion tranche in June and will in effect close the first review of the programme, almost a year after it had been expected to be closed.

Since the start of the programme in August last year, Greece has received €28.9 billion.

For the review to be completed, Greece had to pass legislations on various areas such as pension cuts, VAT rise, income tax reform, privatisations, reform of the energy sector, repayment of arrears, the recapitalisation and governance of banks, or foreclosures for owners who have failed to repay their loans.

Moscovici said that the measures amounted to savings worth 3-percent of GDP for the period 2016-2018.

The work is "not always simple, not always spontaneous", he noted, but he assured that Greece and its creditors were "building a success story".

The second review, which should start in the coming weeks and will lead to another tranche of aid, will be "more about implementation [of the measures already taken] that hard legislation", the commissioner said.

EU officials expect it to go more smoothly than the first and to be completed before the end of the year.

But all parties in the programme know that there is an elephant in the room: debt relief.



The IMF, which was part of the two first bailouts of 2010 and 2012, is not formally part of the third one. It said it would take a decision before the end of the year, based on whether it considers that Greek debt is sustainable.

Debt relief

The Washington-based institution and EU creditors reached an agreement in May on short and mid-term debt relief, which the president of the Eurogroup, Dutch finance minister Jeroen Dijsselbloem says remains valid.

"I'm not going to open the debt discussion every month. Some are eager to do so, I'm not," he said in Luxembourg.

But on Sunday, the Reuters news agency said that the IMF would not join the programme and would take instead a special advisory status.


The IMF maintains that measures are needed to make the long-term Greek debt sustainable. Others, mainly Germany, have ruled it but says the fund should stay on board.

Other parties say that new talks, which look inevitable, will amount to "squaring the circle" between the fund and Germany.

Growth problem

For some of them, Greece's main problem is not debt but the lack of reforms in the past and of investment now to sustain lasting growth.

"The debt is not sustainable, but it is not a question of percentage [of the GDP], it is a question of growth," a diplomat told EUobserver, pointing out that Greece's competitiveness has plummeted again in the latest World Economic Forum's ranking published at the end of September.

In Luxembourg, both Dijsselbloem and Moscovici pointed out that the Greek economy recorded three consecutive quarters of growth.



But for the diplomat, the figures are deceptive because with weak foreign investment and exports Greece's economy has little reserve for a productive growth and not a catching-up growth.

EU and IMF agree debt relief for Greece

Greece's creditors will take measures to reduce the cost of debt repayment and for the first time say debt could be reduced in the future. They also decided a €10-billion new loan.

Opinion

Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

Facebook to shift ad revenue away from Ireland

Public pressure about low corporate taxes appear to have pressured Facebook to launch plans to stop routing international ad sales through its Dublin-based headquarters in Ireland.

News in Brief

  1. Russia looks to crypto-currencies to evade EU sanctions
  2. Juncker embroiled in Luxembourg wire-tapping trial
  3. Kurz close to forming new Austrian right-wing government
  4. Ministers reach deal on fish quotas but overfishing continues
  5. UK parliament to vote on right to veto final Brexit deal
  6. French government rules out Corsican autonomy
  7. Salmonella food poisoning on rise in Europe
  8. EU institutions agree to start talks on lobby register

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. 2018 fishing quotas agreed - but Brexit muddies waters
  2. Medical HQ to spearhead EU military push
  3. Facebook to shift ad revenue away from Ireland
  4. EU renews glyphosate approval, pledges transparency
  5. Romania searching for EU respectability
  6. Last chance for Poland to return property to rightful owners
  7. Commission attacks Tusk on 'anti-European' migrant plan
  8. VW to EU: We will fail on recall promise

Stakeholders' Highlights

  1. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  2. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  3. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  4. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  5. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  6. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  7. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  8. Dialogue PlatformThe Turkey I No Longer Know
  9. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives
  10. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  11. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  12. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level