Greece ponders Eurogroup deal as doubts emerge over IMF role

Greece ponders Eurogroup deal as doubts emerge over IMF role

Prime Minister Alexis Tsipras said on Wednesday night that the agreement reached following a Eurogroup meeting in Brussels would usher in a “period of stability” but the International Monetary Fund indicated that it might not remain involved in the program because of differences with the eurozone over debt relief for Greece.

“The Eurogroup decision lifts the uncertainty and we can now enter a period of stability,” tweeted Tsipras. “We now have the chance to build a stable economy with fair growth.”

Tsipras’s comments came after government officials spent the day trying to talk up the agreement, which will see Greece receiving 10.3 billion euros over the next few months if it fulfills certain conditions. The deal also commits the eurozone lenders to making some minor adjustments to Greece’s debt in the short term before examining further relief once the adjustment program expires in the summer of 2018.

“The vicious cycle of uncertainty and recession is coming to an end and being replaced by the conditions for the country to return to the markets,” said government spokeswoman Olga Gerovasili.

However, government officials admitted in private that the deal fell short of what they had been hoping for, particularly because the eurozone had resisted the IMF’s call for immediate and unconditional debt relief for Greece over the course of the program.

Another concern for the coalition is the lenders’ demand that it make changes to the legislation passed through Parliament on Saturday, such as lifting the restriction on the sale of nonperforming loans that are backed by state guarantees, before any funds can be disbursed.

Athens was also told that it would have to reach reform milestones in the fall before it could receive the second tranche of bailout funding. The first installment, which is set to be released in the coming weeks, will be 7.5 billion euros, while the second one will reach 2.8 billion.

The prospect of having to vote through more measures was not at all well received by SYRIZA MPs as they feel they have already taken on a considerable burden over the last few weeks, when they passed two multi-bills containing a wide range of measures.

The Greek government is also likely to have been concerned by comments emerging from the IMF on Wednesday afternoon, when a Fund official told journalists that there are no guarantees the Washington-based organization will retain a financial involvement in the Greek program.

“Greece is in a situation where it needs a disbursement, and so we were certainly willing to concede on some points,” said the official, who was speaking on condition of anonymity. “But we have not conceded on the point that we need adequate assurances regarding debt relief before we go to our board.”

The IMF’s European director Poul Thomsen had made it clear after Tuesday’s 11-hour Eurogroup that the IMF would reassess Greece’s situation later this year before its board is asked to take a decision on whether to join the program or not.

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