Prospects for debt deal at Eurogroup unclear

Prospects for debt deal at Eurogroup unclear

With a new raft of austerity measures voted into law by coalition MPs, the government has shifted its attention to Monday’s crucial meeting of eurozone finance ministers in Brussels, hoping for a decision on debt relief as well as a green light for bailout funds.

But although the Eurogroup is expected to approve the disbursement of some 7 billion euros in loans, which Greece needs to pay off debts maturing in July, a comprehensive agreement regarding the country’s debt is not likely, European officials have suggested.

After the austerity vote in Parliament late on Thursday, Prime Minister Alexis Tsipras told reporters pointedly that the government had fulfilled its obligations and that “the ball is in the court of creditors.” “We expect and we deserve, from next Monday’s Eurogroup meeting, a decision on the regulation of Greek public debt which corresponds to the sacrifices of the Greek people,” the premier said.

Privately, however, sources close to Tsipras were more restrained in their expectations, mindful of the fact that German officials and representatives of the International Monetary Fund continue to disagree about how the Greek debt problem should be tackled.

One top-ranking European official indicated on Friday that there was only a 50/50 chance of an agreement on debt being reached at Monday’s Eurogroup.

Another official said it was likely that another Eurogroup summit will have to be held ahead of a scheduled meeting on June 15 if no debt agreement is reached on Monday.

The plan is for the bailout funding to be disbursed to Athens on June 16. All prior actions the Greek government has pledged to the country’s creditors as part of the last bailout review must be implemented before then.

In the meantime, representatives of Greece’s lenders are to sit down over the weekend and examine the legislation that the government voted into law late on Thursday and produce a compliance report.

All 153 coalition MPs backed the new multi-bill of austerity measures that foresees new cuts to pensions and tax increases, which are to come into effect in 2019 and 2020 respectively, as well as the privatization of Public Power Corporation and other state bodies.

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