Greek FinMin heads to Brussels in hope of deal at Eurogroup

Greek FinMin heads to Brussels in hope of deal at Eurogroup

Finance Minister Euclid Tsakalotos is to join his eurozone peers at a summit in Brussels on Monday, hoping for their approval of a staff level agreement (SLA) following hours of negotiations in Athens over the weekend between Greek officials and foreign envoys.

The two sides agreed on a series of contentious reforms, including the sale of four Public Power Corporation lignite plants across the country. 

Whether an SLA is signed off on Monday or not, Athens still faces a tough few weeks, as it must enforce dozens of economic reforms, many before Christmas. The government is expected to bring a multi-bill to Parliament in the first half of January legislating some 100 prior actions. Although none of these measures carry a fiscal cost, in the sense that they do not include cuts to salaries and pensions, they are expected to strike some uncomfortable chords with MPs of leftist SYRIZA.

The resumption of foreclosures of Greek homes has already created divisions within the party, as well as fueling violent protests at courthouses. But there have been efforts to overcome objections as Greece’s creditors have made it clear that electronic foreclosures must move forward, bolstering Greek banks, if the third bailout review is to conclude successfully.

Sources indicated that talks on the third review had progressed surprisingly smoothly, partly because the International Monetary Fund had not raised objections as it has done in the past. It appears that the IMF will retain an impartial role until February, when a decision is expected on whether it will participate in the third program or not.

Tsipras, meanwhile, is said to be mulling a potentially risky move by proposing that IMF demands for pension cuts in 2019 be suspended on the condition that the IMF has departed from the program on or before its expiry in August 2018, and that revenues point to a 3.5 percent primary surplus target being met comfortably for 2018 without the need for pension cuts.

In a joint statement with European Economic and Monetary Affairs Commissioner Pierre Moscovici in Lisbon on Saturday, Tsipras appeared upbeat about the completion of the review and the country’s prospects for growth and recovery. “The Greek people’s sacrifices must finally be rewarded,” Moscovici said.