Greece, lenders to decide on prior actions for loans

Greece and its lenders are expected to agree this week, before the next Eurogroup meeting on October 5, what prior actions Athens will have to carry out to unlock a further 3 billion euros in bailout funding that has been pending since August.

It appears that the outstanding 3 billion euros will be broken down into two tranches, the first one totaling 2 billion and the second 1 billion. However, it has not yet been decided what measures will trigger the release of each installment. Greece has agreed to carry out a total of 201 actions by June 2018, when the program ends. However, 105 of these have to be completed by the end of this year, underlining how quickly the government will have to move in the months ahead.

A European official suggested to Kathimerini that the lighter measures would be included in the first package of actions, which would secure the release of another 2 billion euros. However, the measures demanded for the second subtranche of 1 billion would likely be much tougher, including pension reform, bank recapitalization and fiscal measures.

The government is keen to complete the recapitalization by the end of the year as the EU’s Bank Recovery and Resolution Directive (BRRD) applies from January 1, leading to the bail-in of uninsured depositors. A European official told Kathimerini that some eurozone members, such as Germany, the Netherlands and Finland, would prefer a bail-in as it would bring down the cost of recapitalizing Greek banks for their taxpayers.