Banks’ capital needs remain main obstacle to deal between Greece and troika
Greece and the troika still remain some distance apart on a number of issues that are preventing inspectors from concluding the review of the Greek program and recommending the release of further bailout funding.
The main sticking point during talks between Finance Minister Yannis Stournaras and the country’s lenders on Wednesday was the disagreement over Greek banks’ capital needs. Athens puts the figure at 6 billion and the troika closer to 9 billion. Greek officials suggested to the troika that the banks issue be separated from the review.
“The disagreement between the troika and Greece on banks should not be the reason not to conclude the review,” a senior Finance Ministry official who declined to be named told Reuters.
“This means that Greek banks will be recapitalized based on the Greek central bank’s [stress test] results. When the European Central Bank’s stress tests come out, and if there is a difference, then additional capital will be provided,” the official added.
Other pending issues include the troika’s demand that rules on mass dismissals change. A planned meeting Wednesday between the lenders and Labor Minister Yiannis Vroutsis was postponed. The troika also wants to approve a new midterm fiscal plan, which has to be submitted to Parliament by May and will contain the measures needed to cover next year’s fiscal gap.
On Tuesday, the head of the European Stability Mechanism, Klaus Regling, told reporters that some 9 billion euros in bailout funding which Greece is expecting to receive could be released as early as next week.
“If there is a positive result of the troika review and if conditionalities are met, there could be a rapid disbursement of funds to Greece,” he said.
However, there is a strong possibility that Stournaras will travel to Monday’s Eurogroup in Brussels without an agreement between Athens and the troika. This could lead to the disbursement of money for Greece being approved during a eurozone finance ministers’ teleconference later on in March. The next Eurogroup is an informal one and will be held in Athens. European officials have made it known they would not like the decision on the bailout tranche to be taken in the Greek capital and would prefer the transfer not to be approved so close to the date when 9.8 billion euros of bonds mature in May.
