European officials postponed the decision on whether or not Eurogroup will authorize the already-agreed upon disbursement of cash to Greece until the next Euro-working group in March 25.
The Eurogroup postponed the decision on disbursement because of a delay in reform implementation by Athens.
One main issue which remains to be solved includes the anticipated agreement between the Greek government and the banks on ways to reduce the number of the banks’ non-performing loans. In addition, details of how Greece deals with bankruptcy, namely the government’s promise to exempt primary residences from bankruptcy proceedings, is also under discussion.
The four large systemic Greek banks intend to reduce their non-performing loans by €60 billion by the end of 2021, a target which is seen by many experts as far too optimistic.
European Commissioner for Economic and Monetary Affairs Pierre Moscovici said that he will inform the Eurogroup that there are positive developments on the issue of Greece, as progress has been recorded to the majority of the commitments, adding though, that it is too early to have a formal decision today.
According to media reports, the disbursement which Greece is due to receive is approximately one billion euros.
The country does not actually need the money to cover its expenses, as it can comfortably cover all its financial obligations; however, the delay in the decision by the Eurogroup could send the wrong message to global markets about Greece’s trajectory to recovery.
The cash disbursement is the first installment of the sum of €4.8 billion which is due to be remunerated to Greece by the year 2022.
The funds were scheduled to be returned to Greece in installments every six months, provided that the country implements crucial fiscal and structural reforms.