Eurogroup raises hopes for deal and disbursement before summer

New Europe / Alexandros Michailidis

Eurogroup finance ministers meeting at the European Council in Brussels, Belgium on May 22, 2017.

Eurogroup raises hopes for deal and disbursement before summer


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“I expect and I am working on a deal today,” said the Eurogroup president Jeroen Dijsselbloem in Brussels, before another critical meeting for Greece was to start.

Athens’ progress may not be the first item on the eurozone finance ministers meeting agenda, but the discussion could be long, as the EU institutions and the International Monetary Fund (IMF) are seeking for a common ground on debt relief.

“The IMF has asked for more clarity, for more specificity, this is what we work on today,” said Dijsselbloem appearing positive on the outcome of the meeting, minting however the extent of the political agreement.

Macroeconomic convergence between EU and IMF is needed until the end of the programme

“In some topics for example of growth there is still little expectation,” said Dijsselbloem, referring to the program’s macroeconomic assumptions.”Until we take the final decision this year, I hope there is more clarity on growth assumptions,” added the Eurogroup president.

On IMF’s participation to the Greek programme, Dijsselbloem suggested that this is rather the target of Monday’s meeting, as all the other issues on the second review are settled. “It is time for the IMF to come on board, to formally take a positive decision for an IMF programme”.

However, what can be agreed at this point at Monday’s Eurogroup meeting, is limited due to technical discussions that have to take place. On growth projections, Dijsselbloem reminded reporters that “it is not a matter of political decision making. You can’t ask a group of finance ministers to come at some sort of political agreement on what the growth forecast should be.”

“The experts will discuss with each other and they will converge, not necessarily today but when we decide finally on the exact size of debt measures which will be at the end of the program this year.” At this point, “it will be very useful to have convergence between the institutions,” adds the Dutch care-taking finance minister.

On the second review tranche and disbursement, Dijsselboem suggested that if everything goes well and prior actions are implemented, then that could be done before summer.

According to an EU official it only takes the political agreement on behalf of the IMF that it will take the decision to attend the programme for the EU side to start the disbursement process. The tranche, however, will not be disbursed immediately, as it would typically take around eight weeks before Athens will be able to disburse.

Even if the European Commission has not the final compliance report of the second review ready as only 105 out of the 140 are finalised, Greece was given the green light at Monday morning Euro working group meeting, making the political decision on the second review more likely.

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