Greek coalition concerned troika inspection may drag on

The International Monetary Fund’s denial of reports that it will host a discussion on Greek debt relief in November and Eurogroup chief Jeroen Dijsselbloem’s insistence that no talks on the next phase for the Greek economy can be held until the troika review due to begin at the end of September, have heightened concern in Athens that it could be in limbo for the next few months.

The Greek government had hoped that the troika’s fifth review of the country’s adjustment program would be completed by the end of October, paving the way for debt relief talks to begin. However, government sources told Kathimerini they fear that the review may drag on for longer, even into early next year.

These concerns are based on the fact that there are a number of key issues outstanding – such as pension reform, mass dismissals, home forecolosures and changes to labor laws – which the troika could decide are obstacles to the completion of the review. A delay in the review could suit Greece’s eurozone partners, some of whom are reluctant to agree to a debt relief package now because they fear there may be a change of government in March if the coalition fails to elect a new president of the republic in Parliament.

According to sources in Washington, the IMF had tried to convince the eurozone to hold a discussion on the debt issue in November but reluctance from the Europeans meant that the Fund had to deny last week through its spokesman Bill Murray that a meeting would take place.

The Finance Ministry has drawn up a back-up financing plan should the review last for several months, preventing the release of the next tranche of bailout funding. The successful reopening of bonds last week means that Greece will not have to pay between now and March 2015 the 1.62 billion euros in T-bills that were provided in the exchange process.

Athens also plans to raise 1.6 billion euros in October via 18-month T-bills, before issuing a 7-year bond in November with the aim of tapping the markets for another 2 to 3 billion euros. This means that the bailout installments will then be used to help cover the funding gap for 2015.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.