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Eurogroup Says Troika Unlikely To Finalize Greek Review In December

Eurozone 121013

The Eurozone finance ministers said on Monday that Greece's creditors are unlikely to conclude the ongoing review of the country's fiscal adjustment program in December as more progress is required on the already agreed measures.

The Troika comprising the International Monetary Fund, the European Union and the European Central Bank will return to Athens on Tuesday to resume talks with the Greek authorities on the fourth review, Eurogroup chief Jeroen Dijsselbloem said in a statement after Monday's meeting.

The Greek authorities have been working constructively with the Troika during the last few weeks, yet further progress is still needed on the agreed milestones of the previous review and on the fiscal and structural measures for the current fourth review before coming to a positive conclusion, Dijsselbloem said.

"We hope that the necessary conditions will be fulfilled quite soon for the Euro Working Group to be in a position to agree on the disbursement of 1 billion euro, or EFSF, before the years end", which is part of the third review, he said.

"Realistically, it's going to be very very hard, if not impossible, to finalise this review before this years end, so the final work will have to be done on that in January," Dijsselbloem said.

"In order for Greece to return to a path of sustainable growth and job creation, further measures which were already in the agreed MoU, we're not talking about new measures, they were already in the agreed MoU, need to be implemented fully," he added.

At the same time, the Eurogroup endorsed the second review of Cyprus' adjustment program and said it remained well on track. The ministers were also satisfied with Ireland's program, for which the Troika successfully concluded the final review.

Dijsselbloem said Cyprus has met all fiscal targets with comfortable margins and significant progress has been made towards recapitalisation and restructuring of the financial sector, allowing for further relaxation of capital controls.

Macroeconomic conditions in Cyprus are developing in line with program projections despite high uncertainty. Although structural reforms are progressing, further efforts are required in some cases, the ministers opined.

The European Stability Mechanism is scheduled to disburse EUR 100 million to Cyprus by the end of this year after the completion of national procedures. The IMF Executive Board will decide on the disbursement of EUR 86 million on December 20.

The final review of the Irish adjustment program will unlock the last disbursement, of which EUR 800 million will come from the EFSM and EUR 600 million from the IMF, after a formal approval from its Executive Board.

"The positive market reaction since the announcement of the Irish decision to exit the program last month shows that this assessment is very much shared by market participants," Dijsselbloem said.

He said the Single Resolution Mechanism or SRM will be on the top of the agenda for Tuesday's Ecofin meeting. "There is a great sense of urgency among the colleagues to reach an agreement if possible tomorrow," he added.

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