With a brief press release, the Eurogroup welcomed on Monday the progress made in discussions between the Greek authorities and representatives of the three institutions, while also noting that more time and effort and required in order to reach a conclusion. For his part, the Greek Finance Minister, Yanis Varoufakis, estimated that a final agreement will probably have been reached within the next two weeks, namely before the country’s cash reserves are used up, a development that would result in a severe liquidity crisis.
Throughout the course of the previous week, European officials had ensured that no great expectations were to be assumed, thus the “lukewarm” statement of the Eurogroup came as no particular surprise. Nevertheless, despite the fact that the easing of the ECB’s stance on the Treasury bills issuance threshold was not related to this joint statement, negative measures were avoided, namely a further “haircut” on the Greek bonds that the ECB accepts as collateral. In response to a relevant question, Eurogroup President Jeroen Dijsselbloem referred to the ECB’s independence, pointing out that “the Eurogroup does not issue press releases telling the ECB what to do”. Similarly, the Greek minister stressed that the Greek government respects the independence of the ECB, noting however, that the waiver which applied to Greece should have never been suspended, nor should this suspension continue.
Following the conclusion of the meeting, participants from both sides talked about the issues on which consensus has been achieved and those that remain under discussion. According to the Greek minister -as well as to Pierre Moscovici, European Commissioner for Economic and Financial Affairs, who mentioned most of these issues in his speech- the former category includes issues like privatisations, the independence of the General Secretariat for Public Revenue, VAT and non-performing loans. On the other hand, it became clear that pending issues mainly refer to employment and social security. Yanis Varoufakis described the pension scheme as a “critical point” in negotiations, saying that the government is determined to protect everyone involved who would otherwise have suffered great losses, had the agreement sought by the previous government been reached. Nevertheless, he pointed out that the sustainability of the social security system is questionable, given the exceedingly high rates of unemployment and undeclared work.
As far as practical arrangements are concerned, the Eurogroup statement also stressed that the decisions of the Eurogroup of 20th February continue to be the main reference framework, whereas once the institutions have reached an agreement at the staff level for the completion of the evaluation, the Eurogroup shall decide on the possible disbursement of remaining funds under the current agreement. As J. Dijsselbloem explained, the disbursement is likely to take the form of sub-tranches according to the reforms implemented, although this method presupposes the existence of an overall agreement.
With regard to the issue of liquidity, the Dutch Finance Minister said that it was discussed at length, that it is the responsibility of the Greek government and that present problems need to be solved soon. He noted, however, that the Greek side has committed to meeting all its obligations. Klaus Regling on the other hand, namely the Managing Director of the European Stability Mechanism (ESM), suggested that a possible failure of Greece to meet its debt obligations could have serious consequences, referring to a payment of a small amount (210.000€) made by Greece to the EFSF on Monday. Similarly, Mr. Regling urged the Greek authorities to speed up their efforts, so as for the process to conclude in the coming weeks. In relation to the post-June era, J. Dijsselbloem said that no “political ground” exists yet for such discussions to begin, given that the already delayed current programme needs to be completed first. Indeed, he said that such a discussion is also impossible on a technical level, given that specific macroeconomic data and calculations are necessary that can only be available after the reform programme has been stabilised.
Schäuble: a referendum would be “useful”
The unexpected answer of the German Finance Minister Wolfgang Schäuble, in response to a journalist’s question on a possible referendum in Greece, paved the way to a parallel round of discussions on this issue, both in the foreground and the background of the Eurogroup meeting.
Upon his arrival to the meeting, W. Schäuble said that a referendum could prove useful, so as for the Greek people to decide if they are ready to accept the necessary reforms or whether they prefer something different. For his part, J. Dijsselbloem noted that this is a national, internal issue in which the council of the Eurozone cannot interfere, although he stressed that such a scenario would result in a delay in the implementation of reforms and hence disbursements. Finally, Yanis Varoufakis said that this particular decision rests with the Prime Minister and the President of the Hellenic Republic, while the priority at the moment lies in the negotiation that is being carried out efficiently and in good faith with the partners.