Greek Prime Minister Alexis Tsipras and his MPs keep repeating that the completion of the bailout program in August will mark the end of the memoranda that caused so much suffering to the Greek people.
However, there are those who believe that the Greek government will not be able to complete successfully all prerequisites for a clean exit from the bailout program in August. They argue that it is likely a new rescue program will replace the existing one come September.
The skepticism stems from the fact that some of the remaining prerequisites are difficult to implement. For instance, the privatization of the former Athens airport site at Hellinikon, an amendment that would make it more difficult for workers’ unions to call a strike, or the auctions of foreclosed homes are requirements that are difficult to be implemented by a populist government that came to power promising the exact opposites of the above.
In the next six-to-eight months, the Greek government and the country’s creditors have to work through thorny issues such as the above if they want to avert yet another bailout program.
According to the Bloomberg analysis, Greece has to follow 10 important steps before the end of the bailout program:
- This week, the government plans to submit to parliament an omnibus bill to implement all the measures needed to conclude the third bailout review. The policies have to be voted on by January 17 so that auditors monitoring the program can present Greece’s compliance report at the January 22 Eurogroup, which will then approve the disbursement of the next bailout tranche.
- In late January, the European Central Bank will finalize the scenarios under which the balance sheets of Greek banks will be stress-tested. The banks have to conclude these audits of their capital adequacy earlier than their EU counterparts.
- By early February, Greece intends to issue a new bond, with a maturity most likely of three or seven years, as it strives to regain full market access after years in the wilderness.
- During the first 10 days of February, the European Stability Mechanism is expected to disburse the loan tranche attached to the implementation of the third review’s conditions. The amount of money Greece will get has yet to be agreed on, but it will be at least 5.5 billion euros, according to the Greek Finance Ministry.
- In February, Greek banks will start sending data to the Bank of Greece and European authorities for the stress tests.
- The Greek government expects that in February creditors will start discussing further debt relief measures.
- In early March, the fourth bailout review is expected to begin. It isn’t clear yet when creditor representatives will return to Athens, but the review has to start in March if Greece wants to complete another 82 required measures on time.
- One of the most important gatherings between creditors before the end of the current bailout program will take place in Washington on April 20-22. The International Monetary Fund’s spring meetings will probably give creditors the opportunity to discuss debt relief and what’s next for Greece.
- In early May, the stress test results will be announced. This will show if Greek lenders need more capital and, if so, how serious the problem is for them and for Greece.
- By the end of May or June, both the Greek government and creditors want to conclude the fourth bailout review and strike a deal on the conditions for any further debt relief and the post-program life for Greece. Greek authorities are ruling out any kind of new rescue program, but the Bank of Greece’s Governor Yannis Stournaras recently said a credit line after August would boost investor confidence. European officials also say there will be some kind of “follow-up arrangement until 2022,” according to a person with knowledge of the discussions, since Greece has committed to primary budget surpluses of 3.5 percent of gross domestic product until then.