Eurozone ready for fresh loan

Eurozone finance ministers would be prepared to grant Greece an extension to its funding “either via a new program or through the extension of the current one if Greece asked it,” a senior eurozone official said on Monday in Brussels. He went on to say that, although Athens does not appear to want a new bailout loan, it would be strange for the International Monetary Fund to continue its disbursements and the eurozone to be outside the program.

That comment may well touch on the meat of the matter that the European, Greek and IMF officials will need to face in the coming months, as the European program expires on December 31, while funding from the IMF is set to continue up to February 2016, making the balance required rather delicate.

The IMF will find it hard to accept continuing to fund a member of the eurozone without the participation of the bloc, while the European Commission will not be happy with having a European Union country receiving funding from an international organization without its contribution.

The European Central Bank has already made it clear that it will not be able to accept Greek bonds after the European program is over unless it exercises more supervision over the Greek economy or unless international rating agencies upgrade the country’s economy, as was the case with Ireland and Portugal.

The issue of monitoring Greece was addressed by the same eurozone official, who stated that “the monitoring of the Greek economy will continue anyway, as Greece collects the profits from the Greek bonds that the European national central banks hold, which is particularly important for the course of the debt, so we need to have a picture.”

The progress recorded in the implementation of the Greek program after the talks in Paris last week and the arrival of the creditors’ representatives in Athens at the end of the month will form part of the agenda of this Friday’s Eurogroup meeting in Milan.

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