Clouds gathering in Brussels for Athens


TAGS: Finance

Expectations are running low ahead of Friday’s Eurogroup meeting on Greece, as Athens is particularly late in implementing the 16 prior actions that were needed over the summer to secure the disbursement of a 2.8 billion-euro subtranche.

Friday’s meeting of eurozone finance ministers is not expected to go beyond an update on the progress of the Greek program, which is seriously lagging. Meanwhile, a report in German newspaper Handelsblatt said that Greece should not expect any disbursements for now, even though the first review was completed in May, as the government has only implemented two out of the 16 prior actions.

Finance Ministry sources say that this Eurogroup was never going to approve a payment anyway as it is an informal gathering and that the delays in the prior actions will be the reason for the arrival of the creditors’ representatives in Athens on September 12.

Despite the concerns expressed by eurozone officials and the completion of just two prior actions so far, the Greek side insists everything is running “according to schedule.”

In Brussels, however, the climate is souring as the failure to implement all the prior actions will push the completion of the first review beyond September. One eurozone official told Kathimerini that “I do not see the first review completed any time soon and as for the second, I do not see it being completed in the near future.”

The creditors are also growing increasingly alarmed by Athens’s rhetoric and stance in asking for more independence from the bailout program, seen as backtracking on reforms. Officials monitoring the government’s moves have expressed their opposition to the Education Ministry’s law banning teacher layoffs from private schools, as this contravenes the spirit of the bailout program. Furthermore, the negative stance of the Labor Ministry toward the labor reforms to come from the second review is also generating concern, with eurozone officials saying the government is “doing more of the same.”