ATHENS — The meeting of the Eurozone’s 19 finance ministers next week is very important for financially stricken Greece, the country’s central bank Governor said March 6.
The meeting, known as the Eurogroup, is to be held in Brussels on March 9 to discuss how much progress Greece has made since it sent the ministers a list of reforms late last month to win a four-month extension of the European part of its international bailout.
“It is very important for the next Eurogroup to be successful, and we’re all working in that direction,” Bank of Greece Governor Yannis Stournaras said after a meeting with Prime Minister Alexis Tsipras and finance officials.
Greece is quickly running out of cash and has to repay debts this month to the International Monetary Fund — which co-funded Greece’s 240 billion euro bailout — as well having as treasury bills coming due.
Stournaras stressed there was “full support for the Greek banks, there’s absolutely no danger. The banks are both adequately capitalized and their liquidity is ensured, so there is no problem with bank deposits.”
Before Greece got its loans extension, there were reports that savers were pulling money out of the Greek banks in droves.
Under the four-month bailout extension Greece was given on Feb. 20, the country has until April to come up with specific budgetary measures that have to be agreed on with those overseeing the reforms — the IMF, ECB and European Commission.
Only once they are complete and the three institutions sign off on Greece’s reforms can the country receive the final outstanding 7.5 billion euro loan installment from its bailout program.
But it is unclear how the country will manage until then.
A senior EU official in Brussels said Greece could get access to early funds if it reaches a comprehensive agreement with the three institutions on its reform plans.
“The institutions will look at all these measures. Then they will come to an agreement with the Greek authorities. Then you agree on prior actions, and when the prior actions have been fulfilled then comes the disbursement,” said the official, who works with the Eurogroup but is not permitted to speak publicly.
The official said it was “theoretically possible” for some reforms to be be rapidly fulfilled and therefore to have the final loan issued in installments. But he noted this was still “a long way away” because technical discussions had not yet begun.
However, Germany — the single largest contributor to Greece’s bailout and one of the countries that have taken a hard line — indicated an early release of funds was unlikely.
Asked whether remaining loans of the bailout could be subdivided or somehow brought forward, Finance Ministry spokesman Martin Jaeger said that had happened in the past “but in this case we don’t see it.”
He indicated the payment of the final installment of loans would require Greece to get approval on its current program of reforms. “When that will be, we don’t know,” he said.
If the Greek program is able to thrash out details of its reform program before the end of April and get approval from the Commission, IMF and ECB, allowing the program to be implemented earlier, “then of course an earlier payment would be possible,” he said. But he insisted that there was a clear sequence of steps “that is binding for us.”
Lorne Cook in Brussels and Geir Moulson in Berlin contributed.Source: The National Herald