ESM increases pressure for reforms
Pressure is growing on Greece to promote reforms where the creditors have identified delays, as the timely completion of the fourth review and the smooth emergence from the bailout program are at risk.
On Tuesday, on the occasion of the decision by the European Stability Mechanism (ESM) for the disbursement of the subtranche of 5.7 billion euros to Athens, the body’s Managing Director Klaus Regling issued a reminder that Greece’s successful exit from the program requires the implementation of reforms.
“The fourth and final review of the program has already started and I am confident that Greece is on the right track to successfully exit the ESM program in August 2018, provided that the remaining reforms are implemented by the Greek government,” he stated.
It followed the comment by a eurozone official in reference to reforms, particularly the privatizations, that “it’s all behind schedule.” This has led the European creditors to consider completing the review at July’s Eurogroup meeting instead of June’s, although sources from the Greek Finance Ministry said on Tuesday that Athens is working for the review to be finished by the June 21 meeting of eurozone finance ministers.
Economic Affairs Commissioner Pierre Moscovici stated on Tuesday that “for the program to be completed in time, a decision should in theory be made on June 21, or perhaps a little later. In any case the deadline today is June 21.”
The decision for the disbursement of the 5.7 billion euros to Greece came some four months after the completion of the third-review negotiations in Athens. The delay was mainly due to online auctions, whose progress became a vital condition for the disbursement.
Further progress on online auctions and the payment of the state’s dues to third parties are the two conditions the ESM is setting for the remaining 1 billion euros from the third installment. That will be disbursed after May 1 and up to June 15 at the latest.
Once that is done, only the fourth installment will be left, estimated at between 11 and 12 billion euros, with the ESM noting on Tuesday that no payout can be made after August 20.
