EWG document reveals plans on Greek debt, post-program supervision, cash buffer

The decisions on Greece’s debt, on extending the grace period for debt repayment, lengthening debt maturity and the cash buffer that will ensure the country’s safe return to the markets will be taken by eurozone’s finance ministers at the Eurogroup meeting on Thursday, according to a document produced by the EuroWorking Group (EWG) during a meeting earlier in the day, which was seen by Kathimerini.

The elements in brackets will be discussed and decided on at the Eurogroup that will follow later in the day.

“The Eurogroup welcomes Greece's commitment to maintain a primary surplus of 3.5 percent until 2022 and to further ensure that the budgetary commitments are in line with the European financial framework,” the document says.

The analysis of the EU indicates that this represents a primary surplus of [2.2 percent of GDP] on average for the period 2023-2060. 

The gross debt servicing needs must remain below 15 percent of GDP in the medium-term and below 20 percent in the period beyond, while ensuring that debt is on a downward path.

Concerning the framework of Greece’s post-bailout supervision, the Eurogroup will stress that debt relief measures “must contain incentives to ensure strong and continuous implementation” by Greece of the reforms agreed with the program.

The document says the Eurogroup will also reiterate that the legal proceedings against experts of Greece’s privatisation agency TAIPED “are a matter of very serious concern.”

There is also concern about the prosecution of Greece’s former statistics chief Andreas Georgiou and other senior members of ELSTAT regarding the alleged falsification of deficit data.

The Eurogroup “continues to have full confidence” that the data endorsed by Eurostat and submitted by ELSTAT since 2010 are in line with the rules in force in all member-states and instructs the institutions to continue monitoring developments in these cases and report back to the Eurogroup, in the context of the post-bailout supervision.

The document also says the European Stability Mechanism (ESM) will approve the disbursement of the fifth and final loan tranche of the Greek program which will total [11.7-21.7] billion euros.

Of this number, [5.5] billion euros will be used to repay Greece’s debt, while [6.2 – 16.2] billion will be used to build the cash buffer.

In total, Greece will exit the program with a substantial liquidity buffer of [20.8 – 30.8] billion euros to cover the state’s financing needs for [around 21 or more than 28] months after the end of the program.