The Eurogroup welcomed a staff-level agreement between Greece and the institutions, paving the way for the finalisation of the first review of Greece’s macroeconomic adjustment programme.
This will enable the European Stability Mechanism to unlock the next tranche of financial assistance to Greece (€10.3bn) available under the programme. “We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme.”, said Eurogroup President Jeroen Dijsselbloem
This amount will be released in several instalments once Greece has implemented all agreed prior actions, and the euro area member states have endorsed the agreement according to their relevant national procedures.
The staff-level agreement between Greece and the institutions contains a package of reforms to be implemented by Greece, and an additional contingency mechanism. The latter will set additional reform measures in motion if the programme’s agreed primary surplus target of 3.5% of GDP is at risk of being missed. The Eurogroup commends progress achieved by Greece in already implementing the majority of agreed prior actions.
The Eurogroup also agreed on a set of short-, medium- and long-term measures to ensure the sustainability of Greece’s public debt. Some of these measures will be implemented between the conclusion of the first review and the end of the programme, others upon successful conclusion of the programme. The scope of the latter will be determined based on an updated debt sustainability analysis.
If a more adverse scenario than is currently expected materialises after the closing of the programme, the Eurogroup agreed on the possibility to activate a contingency mechanism for further debt-related measures.
The Eurogroup welcomed the intention of the IMF management to recommend to the IMF Executive Board to approve a financial arrangement before the end of the year that will support the implementation of the agreed reforms.
SOURCE: European Council
PHOTO: The European Union [Jeroen DIJSSELBLOEM, President of the Eurogroup]