Eurozone finance ministers on Monday gave Greece a tight timetable for the completion of the fourth and final bailout review, the agreement on the post-bailout framework and the measures to ease its debt, so that everything will be completed by June 21. In Monday’s Eurogroup meeting they also opened the way for the disbursement of the first subtranche of the third review, amounting to 5.7 billion euros, by the end of this month.
Despite the optimism expressed by officials after the Eurogroup meeting on Monday, the next few months will see a standoff between Greece’s creditors, with the International Monetary Fund pushing for the implementation of all measures voted and the reduction of pensions and the tax-free level next year and not gradually in 2019 and 2020 as the European Commission would have it.
Using different forecasts to Brussels, the IMF will fight hard against the implementation of the so-called countermeasures, on which the government is counting to soften the political blow from the new measures. The final decision will be made at the end of the fourth review, by which time the definitive Eurostat figures on 2017 will be out.
By Easter, Athens has also promised to present the Eurogroup with its growth plan, explaining its vision for the Greek economy and what steps should be taken once the country has emerged from the program. The Greek program is expected to include the reduction of bad loans, reforms for the efficiency of the justice system, the imposition of growth-friendly taxes and the completion of the cadaster.
It became quite clear to Greece that in the next 100 days “the momentum has to be maintained and the procedures have to be accelerated,” as European Economic and Monetary Affairs Commissioner Pierre Moscovici stated. That’s because the fourth review has 88 prior actions, including the adjustment of “objective values” (property rates used for tax purposes), as well as a series of privatizations and the appointment of senior administrative officials using clear criteria.
International developments will also play a role, as they may well affect Greece’s full return to the markets, along with the banks’ stress tests whose results will be announced on May 5.