Greece: Eurogroup valid in easing the aid plan – Les Echos

There is this time no psychodrama. The Eurogroup confirmed Friday in relative serenity the third aid plan for Greece, which must provide 86 billion euros in the country over 3 years. Alexis Tsipras can therefore blow: this agreement with the eurozone – which must still be confirmed by several national parliaments, the Bundestag – will allow him to touch on Wednesday first with 13 billion euros to repay 3 5 billion owed to the ECB with a maturity falls on Thursday.

Ten other billion will be spent on recapitalizing banks, which also will involve bondholders ‘seniors’. Finally, three billion should be distributed in October to cover the financing of the Greek state needs. In total, the first tranche of aid therefore amounts to 26 billion, before Europeans carry in October to a first review of efforts by Athens on reforms in exchange for these funds.

No excessive dramatization

This new Eurogroup decided by its atmosphere with all those that have taken place since the beginning of the year: no excessive dramatization, no veiled threats, no door slamming, the actors seemed to have suddenly changed part compared to the one they were playing us for months. “Confidence has returned to Greece among the finance ministers,” assured Michel Sapin, the great French silversmith. In fact, the good will shown by the Greek Government three weeks to develop a reform program in exchange for aid has been welcomed by all Ministers.

Even the uncompromising Wolfgang Schäuble had its first positive words about the country for months, underlining that the government “actually now trying to put the country on the path of economic development” . “The cooperation of the Greek government has been very strong, it helped,” added Jeroen Dijsselbloem. The Eurogroup President trusts that the program “if implemented with determination,” can bring to growth despite new budget cuts that may be needed.

The issue of the IMF’s financial participation

The tenacity of Alexis Tsipras, who did not hesitate to shatter his majority to confirm this reform program by the Greek Parliament ahead of the Eurogroup Friday, was appreciated at its true value by its European neighbors. Finally, the good report given unambiguously by the IMF to the Greek efforts – Christine Lagarde, its leader, spoke by telephone during the meeting to say that she thought the plan – has lifted the last reservations in Berlin. “Germany, which has lost confidence that the IMF needed to give the green light. That’s why everything was done for the IMF are clearly pronounced, “said a European diplomat.

The Fund, however, has not said anything about his intentions financial participation in this aid plan, the loans will have a maturity of 32.5 years. Appointment was taken in the fall on this central issue, which promises to quickly recover from the tension within the Eurogroup. The IMF has warned that he indeed was no question for him to put the money if the burden of Greek debt was not reduced, old sea serpent negotiations with Athens for 5 years.

While it is tied to the presence of the IMF, Germany does not intend to let go too much ballast on this issue politically very sensitive. Clearly, no question of nominal cuts (“haircuts”) in debt. “The debt sustainability can be achieved by the ambitious reform program without” haircuts “, although other relief measures may be considered” forward cautiously Jeroen Dijsselbloem. By October, Greece will therefore have to show their credentials on the forehead reforms if it wants to gain concessions (extension of the maturity of loans for example) on its debt. The lull therefore is probably only temporary.