Review may not end until July

Review may not end until July

Eurozone officials in Brussels are now considering a package solution on Greek milestones at the July Eurogroup meeting, and not June’s, as was recently estimated, as they have identified notable delays in a series of reforms, particularly on the privatizations front.

“It’s all behind schedule,” a European official said referring to the fourth bailout review, which was originally planned to finish by May. It now appears likely the fourth review won’t be wrapped up before the end of June or even July, owing to delays recorded in the main privatization projects as well as the concession of the Egnatia Highway.

For Brussels, reforms in the energy domain are particularly important, so the European Commission is not going to back down on them; eurozone officials point to the privatization of Public Gas Corporation (DEPA) and the sale of PPC’s lignite-powered plants in particular.

The creditors made their intentions clear to Energy Minister Giorgos Stathakis last week in a conference call: Stathakis committed himself to the completion of the energy sell-off program within the agreed timetable, and agreed to update the creditors weekly on the steps taken, just like the other ministers with pending prior actions in their competence.

The binding timetable provides for the start of the privatization process for Hellenic Petroleum and for DEPA within this month and for the concession of 17 percent of PPC by end-June. Also by the end of March the government must submit to Parliament the bill for the concession of the PPC units with the tender to begin within June. All energy privatizations will have to be completed by the end of the year.

Seeing as Athens may fail to accomplish all the milestones by the end of the program in August, Brussels is considering alternative scenarios. The first, if many prior actions remain pending, provides for the non-disbursement of the final tranche to Greece, which is necessary for its cash buffer, while the second provides for the unfinished reforms to be transferred to the post-program requirements from Athens.

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