Tuesday

25th Sep 2018

Eurogroup makes 'progress' on Greek deal

  • "The whole agreement depends on all the pieces of the jigsaw puzzle," said Greek finance minister Tsakalotos. (Photo: eu2017mt/Flickr)

Eurozone finance ministers swapped Brussels' brand new Europa building for old Valletta's Grand Master's Palace, but they came out on Friday (7 April) with the usual optimistic line about Greece.

"We have achieved significant progress since the last meeting," Eurogroup president Jeroen Dijsselbloem said at a press conference after a meeting in Malta's capital.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • "The Greek people deserve the conclusion of the second review," said EU finance commissioner Moscovici (l). (Photo: eu2017mt/Flickr)

After months of delays and weeks of difficult talks, ministers endorsed an agreement between Greece and its creditors - the European Commission, the European Central Bank, the European Stability Mechanism, and the International Monetary Fund (IMF).

But the agreement will only allow experts from the creditor institutions to go back to Athens and try to reach a so-called staff-level agreement on reforms to be made by the Greek government.

The reforms are needed to conclude the second review of the bailout programme that was launched in 2015, and to allow the disbursement of a new tranche of financial aid.

In order to close the review, the Eurogroup will however need to agree on additional issues - Greece's fiscal targets for few first years following the end of the programme in 2018, and the sustainability of Greek debts.

"We have an agreement on the overarching elements of policy in terms of size, timing and sequencing of the reforms," Dijsselbloem said on Friday.

Reform package

He said that Greece and its creditors have agreed on the principle of a reform package, designed to cut spending by 2 percent of GDP.

One percent will come from cuts in the highest pensions by 2019 and the other percent will mainly come from an increase in the income tax threshold.

Details based on this agreement in principle will be discussed by the Greek government and the institutions' missions when it returns to Athens, most likely next week. A reform of the labour market is also still on the table.

To compensate for the effect of these austerity measures, the Greek government will be able to pass "expansionary measures" that would be implemented "on the assumption that the economy is doing better and the fiscal path is doing better than expected," Dijsselbloem explained.

Greek finance minister Euclid Tsakalotos told journalists that the measures will address social issues such as "child poverty, employment, housing, investment, or old age pensioners' contributions to medical costs".

The spending-cut reforms required by creditors and the measures requested by the Greek government to help people most hit by the crisis will be tabled at the same time in the Greek parliament, and will have to be adopted before the Eurogroup closes the review.

Helping Greece

"This is a balanced agreement," EU finance commissioner Pierre Moscovici said at the press conference, adding that it would "help Greece get on its feet again".

"The Greek people deserve the conclusion of the second review," he said.

What Dijsselbloem called the "final stretch" before a deal and the disbursement of the next loan is likely to be difficult.

Greece, its eurozone partners and the IMF will have to agree on the country's fiscal targets and future debt relief measures.

They need to decide how many years Greece will require to reach a budget primary surplus - the budget surplus before debt payments - of 3.5 percent of GDP after 2018.

The longer the target will be set - between three and five years, according to sources - the more Greece will have to maintain austerity measures.

The decision also has an impact on the sustainability of the Greek debt, with the IMF insisting that it cannot stay in the bailout programme if the debt is unsustainable.

Jigsaw puzzle

"The whole agreement depends on all the pieces of the jigsaw puzzle," noted Tsakalotos.

In a statement after Friday's Eurogroup, the Washington-based institution said that there were "good prospects for successfully concluding discussions on outstanding policy issues".

It added that its eurozone partners will have to come up with "satisfactory assurances on a credible strategy to restore debt sustainability" before it can decide whether or not it will stay in the programme.

The IMF says that the fiscal targets are too difficult to reach and that measures must be taken to reduce the weigh of the debt on the Greek economy. But the staunchest opponent of that position is Germany, which at the same time says that the bailout programme can only continue with the IMF.

"It is basically a discussion between Germany and the IMF," an EU official told EUobserver.

A diplomat from a member state, also implicitly referring to Germany and the IMF, noted that part of the delay in recent talks was because "some want to talk about the debt as late as possible".

All leaders in Malta pointed out that it was urgent to close the second review in order to dissipate uncertainties over the Greek economy, and also to avoid a crisis when Greece has to repay more than €7 billion in July.

"We need a deal very quickly," Tsakalotos insisted, adding that "very few actors want a new Greek crisis".

Greek bailout talks to 'intensify'

Greece and its creditors will meet in Brussels later this week to unblock negotiations needed for a new tranche of financial aid, amid concerns over the country's economic situation.

Greece and creditors break bailout deadlock

Athens agreed on budget cuts worth up to €3.6 billion and extracted some concessions from creditors, but the IMF warned the package might not be enough.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

News in Brief

  1. ECB's Draghi set to clarify role in secretive G30 group
  2. Half of EU states at risk of missing recycling target
  3. Commission refers Poland to EU top court over rule of law
  4. Open Society Foundation takes Hungary to court
  5. EU court asked to rule on halting Brexit
  6. EU threatens Switzerland on stock trading
  7. Italy's new basic wage restricted to Italians
  8. UK tycoon offers to create pro-Brexit party

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Missing signature gaffe for Azerbaijan gas pipeline
  2. Every major city in Europe is getting warmer
  3. No chance of meeting EU renewable goals if infrastructure neglected
  4. Brexit and MEPs expenses in the spotlight This WEEK
  5. Wake-up call on European Day Against Islamophobia
  6. Sound of discord at 'Sound of Music' Salzburg summit
  7. Salzburg summit presses for bigger Frontex mandate
  8. UK's post-Brexit plan 'will not work', EU says

Stakeholders' Highlights

  1. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  2. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  3. Mission of China to the EUChina: Work Together for a Better Globalisation
  4. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  5. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  6. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  7. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  8. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  9. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  10. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  11. FIFAGreen Stadiums at the 2018 Fifa World Cup
  12. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development

Join EUobserver

Support quality EU news

Join us