Thursday’s extraordinary Euro Working Group ended with confirmation of the provisional agreement between the Greek government and its creditors, but without any talks on the lightening of the Greek debt.
After the meeting ended, a European official said rather vaguely that the EWG welcomed the preliminary agreement and stressed that “once the prior actions are voted by Greece the Eurogroup will be able to approve the policy package and the terms for the next disbursement, as well as arrange the sustainability of the Greek debt in the immediate future on the basis of the May 2016 agreement.”
Another official said there was no discussion on the sustainability of the Greek debt, which remains a bone of contention between the eurozone and the International Monetary Fund. It is also clear that such an analysis would first require a decision on the level of Greek primary surpluses after the completion of the Greek program in 2018.
The issue was discussed by the IMF board in Washington on Wednesday. The head of the European program, Poul Thomsen, tried to contain board members’ expectations, reminding them of last May’s agreement with the eurozone and saying that measures to ease the Greek debt will be determined with precision and applied upon the completion of the bailout program, not earlier.