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20th Jan 2017

Troika to return to Greece in search of debt deal

  • The Troika will return to Athens later this week, the Eurogroup agreed on Monday (Photo: consilium.europa.eu)

Greece's creditors will return to Athens later this week in a bid to conclude the latest review of the country's €240 billion bailout programme, eurozone finance ministers agreed on Monday (17 February).

Officials from the Troika - who represent the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) - began their review in September, but left Athens in December without agreeing on the next round of labour market reforms and spending cuts.

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They also remain at loggerheads with Athens after claiming there is a €3 billion shortfall in the country's 2014 budget.

Neither the €1 billion tranche of funding tied to the review or any additional aid will go to Greece until there is an agreement.

But speaking with reporters in Brussels on Monday, economic affairs commissioner Olli Rehn said "encouraging progress" means there is "a chance" of reaching a deal.

"In view of the progress made and assurances given by the Greek finance minister we now expect mission teams to return to Athens towards the end of this week," he noted.

"If everything goes according to plan we can complete the review before the end of March," he added.

The Greek government has caused some surprise in Brussels in recent weeks by bullishly talking up its economic performance.

Prime Minister Antonis Samaras said on Sunday the country had registered a budget surplus of more than €1.5 billion despite the fact that EU statistics agency Eurostat will not formally publish its budget data until April.

Samaras' government says that the terms of its bailout mean it is entitled to relief on its debt burden, which currently stands at over 175 percent, when it achieves a surplus.

While refusing to speculate on the figures, Rehn noted that "data for last year may be better than expected."

The Greek government also expects its battered economy will grow this year for the first time since 2007, following six years of recession which have wiped out more than 25 percent of the country's output.

Meanwhile, the chair of the eurozone ministers’ club, the Eurogroup, Jeroen Dijsselbloem said any decision on whether Greece would need further restructuring of its debt or further loans would not take place until after the summer break.

"The debt has to be reduced and that is precisely what we will talk about after the summer," he noted, adding that further payments could be made to take Greece up until August. He said the Troika's return to Athens is a "positive step… but no guarantee of a positive outcome."

While Athens does not face an imminent cash-flow crisis, IMF analysts believe that Greece will require at least €10 billion in additional loans to cover its bills over the course of 2014 and 2015.

For his part, Klaus Regling, who chairs the EU's bailout fund, said that there was still €10.1 billion remaining under the first stage of the bailout package, which will be completed at the end of 2014.

Meanwhile, fellow bailout country Cyprus received a clean bill of health from ministers on its €10 billion rescue. "The country's economy is proving more resilient than expected ... and the programme is on track," said Rehn.

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