Eurogroup urges Greece and troika to conclude review this week

Finance Minister Yannis Stournaras came under pressure from his Eurogroup counterparts in Brussels on Monday for Greece to reach an agreement with the troika on the long-running review of its fiscal adjustment program by the end of the week, sources said.

During the meeting, fellow eurozone finance ministers are said to have expressed disappointment at the lack of progress with structural reforms, although they recognized that Greece was now on much sounder ground fiscally.

Eurogroup chief Jeroen Dijsselbloem had stressed before the meeting the need for Greece and troika to conclude the review, which has dragged on for more than 170 days.

“It is important for us, and especially for Greece, that the troika and the Greek government arrive at an agreement very soon,” he said.

During the meeting in Brussels, eurozone finance ministers approved the disbursement of Cyprus’s next bailout tranche, which is worth 150 million euros.

In Athens, government sources revealed that Greece is under pressure from the troika to submit to Parliament a new legal framework governing the recapitalization of Greek banks. The new law would allow the bank recap fund, the Hellenic Financial Stability Fund (HFSF), to sell shares it has acquired in Greek lenders at a lower price than had been initially planned.

The HFSF argues that it will make up any shortfall because the remainder of the bank shares it holds will increase in value if Greece’s four systemic banks – Piraeus, National, Alpha and Eurobank – are recapitalized with private funds, particularly if they come from abroad.

Opposition parties, however, are certain to oppose such legislation. SYRIZA has said it is against a move to sell bank shares at lower prices. Yesterday, the leftist party also said it would publicly question the stress test results published by the Bank of Greece last week, which put Greek banks’ total capital needs at 6.4 billion euros.

Sources said that the government is also concerned about the stance of former Prime Minister George Papandreou and those within PASOK who are still loyal to him.