In their final round of talks ahead of the Luxembourg Eurogroup, Eurozone officials are confident that a comprehensive agreement concerning the closure of the fourth and final review of the third Greek bailout programme, along with the finalisation of the Greek debt adjustment parameters and the ratification of the post-memorandum enhanced surveillance programme, is very likely.
Debt talks remain ongoing, according to a senior EU official who said he is “70-80% certain that an overall agreement will be reached,” and added that the International Monetary Fund (IMF) will not activate its programme for Greece, but that the solution reached would be credible for the markets. He described the month-long negotiations on the non-activation of the IMF programme as, “a pity, but not surprising”.
The EU official said a decision on the extension of the European Financial Stability Facility’s second programme of loans would be close to 7.5 years and include a final decision on repayments to the IMF.
The discussions that have taken place and the position of the IMF on post-programme supervision could be taken care of ahead of prior to a sustainability analysis for Greece that is expected in the coming weeks. The monitoring of Athens’ progress will be taken care of on a quarterly basis under the same enhanced supervision applied to the other Member States that previously exited the programme.
The final tranche of rescue loans will raise Greece’s fiscal reserve to €20 billion and act as a signal to the markets that the country’s financing needs are covered until 2020. Depending on the decision for loan extensions, the margin will narrow for other uses. Early repayment of the IMF loans is on the table, but the general consensus for the best way forward is for Athens to accept European Central Bank loans.