An 8-hour Eurogroup session that finished late Monday night in Brussels slashed Greece’s hopes for immediate debt relief after Eurozone’s finance ministers made no deal on Greece’s loans.
Contrary to a climate of euphoria the Greek government tried to create after the ratification of the new meaures on Thursday, the second review of the bailout program was not completed. Furthermore, creditors did not agree to any medium-term debt relief measures, as the Greek side was hoping.
Eurogroup President Jeroen Dijsselbloem said that the issue of debt easing for Greece will be discussed in the next neeting of Eurozone finance ministers, after the International Monetary Fund board meeting where the Greek debt sustainability will be assessed.
Following the Eurogroup session, Dijsselbloem made the following statement:
We have made huge progress on the policy package on which so much work had been done in the last months and on which an agreement had been reached between Greece and the institutions. The Eurogroup, of course, welcomed that very much. We are also very positive on the work done in Greece to implement those agreed measures and reforms in prior actions. The Commissioner will say more about that, but a lot of work has already been done in Greece by the Greek government and they are committed to continue that work as soon as possible, so that we can work towards that next disbursement before the summer.
Having said that, on debt sustainability, we have always said that if there was an agreement on the second review – and I think we are close to formally closing the second review, with a positive outcome – if there is agreement on that, that would open up the debt discussion to see where we are in terms of debt sustainability. This afternoon and this evening we had a first in-depth discussion on the topic of debt sustainability, looking very carefully at needs, options, constraints. But at this point, we have not reached an overall agreement on that part of our discussion. In the coming weeks, we will continue our work on that. We will try to come to an definite conclusion in the next Eurogroup meeting which will be in 3 weeks time. We will use that time well to work hard with the institutions and all member states involved.
The Eurogroup today has made quite clear that it is ready and prepared to specify further what could be envisaged if needed, in terms of debt relief. Of course, there are two guiding principles for the Eurogroup: that it needs to be inside the package that we had already agreed on 16 May, and that the final decision on what is actually needed and will be put in place, in terms of debt relief, will be taken at the end of the programme.
The IMF today also made it clear that they welcomed very much the progress made. They are impressed by the reforms and the work done by the Greeks and they still stand ready to go to the board. But they will also wait for the final discussion that we hope to have in 3 weeks time, in the next Eurogroup, on the issue of debt.
So overall – positive developments from Greece, lots of work done tonight. I think we are very close to that agreement. But tonight, we were unable to close a possible gap between what could be done and what some of us had expected should or could be done. We need to close that by looking at the additional options or by adjusting our expectations. Both are possible, and perhaps both should be done. That I think will surely bring us to a more positive and definite conclusion at the next Eurogroup, in June.
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