Monday’s Eurogroup session was positive for Greece since two loan installments worth 7.5 billion euros have been approved. The first installment worth 4.2 billion will be available in May and the second one worth 3.3 billion will be available by mid June. Prime Minister Samaras revealed that the troika representatives will return to Greece in October.
The Eurogroup was satisfied with the significant progress in implementing the fiscal and structural reforms, demonstrating a “strong commitment” towards realizing the program. According to the Eurogroup Greece is gradually regaining its competitiveness.
The Minister of Finances Giannis Stournaras claimed that the Greek economy is entering a “new phase” and pointed out that the country needs to focus on the deregulation of the energy market, implementation of legislation regarding corruption and dealing with debt-ridden households.
In light of the positive news about the Greek economy, the European Commission has hinted that Greece will need further measures worth 8 billion euros for 2015 and 2016, casting the Greek program’s efficiency and success in doubt. The Commission specifically hints towards measures worth 1.8% of the GDP for 2015 and 2.2%of the GDP for 2016.
The Ministry of Finances suggests that it can cover any potential shortfall in 2015 or 2016 by improving its performance in 2013 and 2014. There will likely be further developments during discussions for the 2014 budget. The PM also explained that due to the very favorable report, the troika will return in October to discuss and negotiate the 2014 budget, rather than June as previously arranged.
Meanwhile the European Stability Mechanism (ESM) approved the first part of a 3 billion euro loan for Cyprus. The first 2 billion was approved on Monday, while the remaining billion will be collectable by June 30th.
