Final preparations, hurdles before closing third bailout evaluation

The finance ministry is feverishly working to codify all the final measures agreed to with creditors, which will be passed into law ahead of the 22 January Eurogroup meeting that will officially close the third evaluation of Greece’s fiscal adjustment programme.

The bill, which will be tabled in parliament on 8 January, includes new criteria for calculating family benefits, a provision that restricts the right of trade union’s leaders to declare strikes, and the opening of closed shop professions.

Alternate Finance Minister Yorgos Houliarakis is expected to outline the areas of progress at an 11 January meeting of the Eurogroup Working Group (EWG), comprised of representatives of all eurozone member-states.

At the same time, the government is obliged to implement about 70 preconditions for closing the evaluation, which were left over after the technical agreement between the government and technocrats was reached in December.

The European Commission will then issue a report with its findings on Greece’s compliance overall with the 110 preconditions for closing the evaluation.

January 22 Eurogroup

If all goes as planned, finance ministers at the 22 January Eurogroup will receive the positive recommendation of the EWG and the compliance report in order to officially certify the completion of the third evaluation and decide the disbursement of Greece next loan tranche.

The amount is expected to be somewhere between 5.5 billion and 8.5 billion euros

There remains, thereafter, the fourth and final evaluation before the bailout programme ends in August, by which time Athens expects to have received a total of 18.4 billion euros.

Testing the markets

After that, it will be decided by June how Athens can use the 27.4 billion euros that will be left over from Greece’s total approved borrowing of 86 billion euros from the ESM.

After the completion of the evaluation, the government intends to exploit the positive confluence of events to attempt a return to the markets, if market conditions appear favourable.

More specifically, a seven-year benchmark bond is planned by the finance ministry, so as to test the disposition of institutional investors in real market conditions.