Euro zone to unlock new loans to Greece, works on debt relief

Cornelia Mascio
Marzo 14, 2018

Eurozone finance ministers decided on Monday that the third review of Greece's bailout program is concluded and the €5.7 billion sub-tranche is to be disbursed by the end of March.

Despite the optimism expressed by officials after the Eurogroup meeting on Monday, the next few months will see a standoff between Greece's creditors, with the International Monetary Fund pushing for the implementation of all measures voted and the reduction of pensions and the tax-free level next year and not gradually in 2019 and 2020 as the European Commission would have it.

To successfully exit the bailout program, Greece will be required to complete a fourth review before August. This would allow Greece to access other loans. It will include 88 reform actions, including new privatisations and reform of the gas and electricity markets.

Economic affairs commissioner Pierre Moscovici warned that the fourth programme remained hard, involving 88 more reforms, but he expressed confidence that Greece would get it over the line.

"These measures are prerequisites to ensure Greece's debt relief", said Centeno.

Centeno said that work was under way on linking future eurozone debt relief to the rate of Greek economic growth, with the objective of granting support if growth slowed.

Among the options being discussed is making any funds that remain unused after the bailout program ends on 20 August, estimated to be up to €27 billion, available for use, or alternatively returning profits made by the European Central Bank on Greek bonds. Centeno said he is feeling positive about their ability to come through.

Without a financial safety net Greece could face market pressure that would increase debt servicing costs.

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