Eurogroup president Mario Centeno praised Athens performance in completing a technical agreement with lenders and urged swift implementation of pending reform requirements after yesterday’s meeting of the eurozone finance ministers.
“We welcomed this package. It goes to show that when there is mutual trust and true ownership of reforms we can reach compromises in a short period of time. We encouraged the Greek government to keep the pace and implement these reforms swiftly before our June meeting. That is a crucial element for the conclusion of the programme,” Centeno said of the staff-level agreement completed on 19 May.
Centeno made clear that decisions on debt relief are contingent on successful completion of the current bailout programme, and indicated that the Eurogroup has asked lenders to review the sustainability of Greece’s debt.
It is debt sustainability, and whether the debt relief measures are deemed adequate, that will determine whether the IMF will participate in the Greek programme.
The ministers decided that at their next meeting in June debt relief measures will be part of a comprehensive Greek package.
“We all want the participation of the IMF,” Centeno said.
‘Ambitious timeline ahead’
“We also held an initial exchange of views on a package of debt relief measures to be implemented at the end of the programme, conditional upon its successful implementation and to the extent necessary. Our common goal is to ensure the long term sustainability of the Greek debt. To that end, we have mandated the institutions to produce a final Debt Sustainability Analysis – on which we can fine-tune possible debt measures. All this, within the boundaries defined in June last year and approved by the Eurogroup,” Centeno said.
“There is some convergence on the debt discussions at the technical level, and Greece tabled a long-term growth strategy and it is over-performing on fiscal targets. Pieces are falling into place, but we have an ambitious timeline ahead of us. I see commitment on all sides so I’m confident that we’ll make it,” the Eurogroup chief added.
Moscovici : Partners should decide on debt relief
Meanwhile, Economic and Financial Affairs Commissioner Pierre Moscovici welcomed the decision to reach a final agreement on the Greek programme by the 21 June Eurogroup, and added that much remains to be done in the interim.
Moscovici suggested that just as Greece has honoured its part of the bargain, so too should its partners, as regards debt relief and making the Greek debt sustainable.
The measures, he said, should be such as to persuade both the markets and the citizens of eurozone countries, which have lent money to Greece.
He said the Commission is working on the post-bailout supervisory framework – which he insisted must not be viewed as a new bailout – that will be put in place after Athens exist the current bailout programme on 20 August.
New Democracy critical
In Athens, main opposition New Democracy said that there is a heavy burden of painful reforms ahead, and that the Eurogroup approved harsh measures that have already been legislated, such as a 3.5 percent primary surplus for five years and pension cuts.
Hence, according to the opposition, the government’s boasts about a clean exit from the bailout memorandum are yet another example of governmental self-deception.