ECONOMY

Creditors see delays in program

creditors-see-delays-in-program

Greece’s creditors are bracing for problems from the outset of the country’s new bailout program given that the snap polls will effectively postpone the first inspection, originally scheduled for October. This will entail a delay in the talks on the debt and the disbursement of tranches.

At the same time the prior actions required by Greece have not yet been determined even though they concern the 3-billion-euro subtranche approved in August and scheduled for disbursement during the fall: The plan was for 2 billion euros to be delivered this month and another 1 billion in October. The prior actions will likely be determined in this month’s Eurogroup meeting.

Creditor officials estimate that local political developments are unlikely to allow for the swift formation of a new government and the completion of the inspection within October as planned. They told Kathimerini that the timetable “is rather unlikely to be fulfilled,” adding that the new timetable will be determined by Greece’s funding needs.

Within this context, they estimate that the state coffers could under certain circumstances respond to requirements up until the end of November without the disbursement of the subtranches totaling 3 billion euros. However, they do not rule out that the Eurogroup might set out two packages of prior actions that Greece must adopt within October and November for the bailout money to be disbursed accordingly over the fall.

Sources say that during the recent informal updating of the International Monetary Fund, the director of the IMF’s European Department, Poul Thomsen, referred to the strong chance of a delay in the next assessment of the Greek program. That would lead to a postponement in the payment of the 3-billion-euro subtranche approved last month and push back any negotiations on the adjustment of the Greek debt – which is a basic condition for the IMF to participate in the new bailout program.