Wednesday 21 February 2018

Deal on stalled Greek bailout reform 'to be agreed next month'

Health workers protest at Greek government plans as a new deal on bailout reforms is tipped to be signed off in February
Health workers protest at Greek government plans as a new deal on bailout reforms is tipped to be signed off in February

Francesco Guarascio and Jan Strupczewski

EUROZONE creditors could approve the completion of the second set of Greek bailout reforms at the next meeting of finance ministers in February, a eurozone official said yesterday.

The approval of the outstanding reforms - mainly concerning Greek fiscal targets, the labour market and liberalisation of the energy sector - would pave the way for further eurozone loans to Athens, which faces large repayments in the third quarter.

Finance ministers of the 19 countries of the eurozone will meet today in Brussels but there hasn't been sufficient progress in Greek reforms yet for them to sign off on a deal now, the senior official said, confirming what the EU economics commissioner Pierre Moscovici said on Tuesday.

Still, the ministers are likely to produce an agreement to continue talks with a view to concluding them at the next Eurogroup meeting on February 20, according to the official.

"There is a good chance" that an agreement will be reached on Thursday to send eurozone negotiators back to Athens so that a deal can be reached in February, the official said.

"February is the last month in which there is no politically significant election in relevant member states," the official said, and this meant "February is not formally but realistically the time when we need to reach a political agreement".

The Netherlands go to the polls in March, and the French will vote in presidential elections in April and likely also in May. Germany, the biggest economy in the eurozone, will hold a general election in September.

A comprehensive deal for Greece will also have to involve the International Monetary Fund, the official said.

There was no formal timeline for the IMF to make a decision about its participation to the bailout program, the official said but added that the decision could not be prolonged indefinitely. The bailout program, now carried only by the eurozone, ends in mid-2018. (Reuters)

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