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It’s rare enough to be statement: ministers of euro zone finance came out rather optimistic, Friday 22 April, Eurogroup mainly on Greece, which stood in the magnificent naval Museum, the port of Amsterdam. After four months of deadlock, of strife between the country’s creditors (the IMF, the European Stability Mechanism and the European Central Bank), the end of the tunnel finally be in sight. Provided that there is no accident, grind the more broken experts of the Greek case, become cautious, six years after the start of the international aid plans in the country.
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the Eurogroup has already been programmed Thursday, April 28: he could be the place for a political agreement on the list of savings measures Athens is negotiating with its creditors since early 2016. This list is now about to be approved. Pension reform, the income tax, measures to overcome the debt “junk” Greek banks, etc. “A few small details, we’re almost there,” confirmed Friday in Amsterdam several sources familiar with the matter.
These measures represent savings equivalent to 3% of the product gross domestic Product (GDP) Greek (5 billion euros) are needed to trigger the disbursement of a new loan tranche to Athens under the third plan of aid to the country, totaling 86 billion euros, decided in August 2015
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Athens sets conditions
the principle of a package of additional measures of around 2% of Greek GDP (3.5 billion euros) was also unanimously accepted Friday. Including the Greek finance minister, Euclid Tsakalotos, even if the side of his delegation, the enthusiasm was not there. “This is insurance,” said Benedict Cœuré, a member of the ECB Executive Board, an additional process of economies that would be implemented if the finances of Greece is moving away too, in the coming months, the trajectory that its creditors have secured him.
the proposal was made by the German Finance Minister, Wolfgang Schäuble, at the spring meetings of the IMF in Washington from April 15 to 17, who met already, all the protagonists of the Greek case. It was designed to bring the views of the ECB, the ESM and the European Commission, on one side, and those of the IMF which, since summer 2015, hesitates to continue its assistance to Greece. The Washington Institute is more pessimistic than its European partners and disputes macroeconomic scenarios to Greek public accounts.
The Heads of Mission of the “troika” had to go back to Athens from this weekend complete the negotiation of the “guarantee” 3.5 billion with the Greek government. Their goal is to reach agreement in the Eurogroup of 28 April. Athens, however, puts its conditions: no question of being too specific on reforms that could lead to these additional savings. No question, either, that among these new measures, Athens is forced, once again, touching the Greek pensions, which have already been widely amputees since 2010.
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And those creditors requirements pose a legal problem to be resolved:
“in the law Greek, it is not possible to pass preventive measures. The solutions which we must arrive in the coming days should be credible for creditors, investors and the Greek citizens “, specified a Greek diplomatic source said Friday in Amsterdam.
“Even Mr. Schäuble was conciliatory”
Last advanced consequent Friday: ministers of the eurozone agreed to open all this time very formally trading on relief the enormous Greek debt (180% of GDP). “Even Mr. Schäuble was conciliatory,” have found two sources close to the discussions. While so far the uncompromising German minister was repeating that he first had to close the discussion on the Greek austerity measures before moving on. “Unable to reach agreement on Greek reforms if the discussion about the debt does not begin” added a senior source on Friday in Amsterdam. Indeed, Alexis Tsipras, the Greek prime minister from the radical left, this promises concession creditors for nearly a year to his fellow citizens.
The caveat IMF
the course of the negotiation is already known – it’s been months that experts “windmilling” scenarios, the ECB and the ESM – and Jeroen Dijsselbloem, the president of the Eurogroup, recalled Friday:
“the Eurogroup is not a nominal debt reduction. (…) We will look [accordingly] the possibilities of “reprofiling” of the debt, longer maturities and grace periods [during which any interest or capital are reimbursed] . “
Everyone would like to reach a political agreement first, the Eurogroup of 28 April, including on the issue of debt, although European leaders recognize that the discussion is very technical, and very politically sensitive
If all goes as planned, with an agreement on reforms and debt starting April 28. – or more likely during may, one or two other Eurogroups being can -be necessary to get everyone to agree – Athens could then receive a new loan (between 5 and 7 billion) in the third aid package. Greece could repay on time the ECB in July (in the country will then face a big maturity date). And strong in a more positive perspective on the sustainability of its public debt, the Greek government could consider returning to finance itself on the markets in the coming months.
This scenario “super-optimistic” could be particularly upset if creditors do not show Athens is quite open to the relief of the Greek debt. A note from Christine Lagarde, the IMF boss, who had traveled to Amsterdam Friday alerted specialists folder: the debt relief could be conditioned to new measures, “to come into force once the measures required effectively implemented, “ said M me Lagarde.
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