Eurogroup-IMF Meeting on Greece Agreed They Disagree; Next Meeting Nov 20/2012

The eurogroup meeting ended on Monday night with no green light for Greece to receive the much anticipated 31.5 billion euro bailout tranche. Euro zone finance minister and IMF officials meet to discuss the Greek debt crisis and find what Christine Lagarde described as a ‘real solution for Greece’.

Stournaras kisses Juncker

EZ finance ministers agreed to give Greece a two-year extension of the bailout program to meet fiscal tagets. This extension will make additional aid of 30 billion euro necessary. EZ, ECB and IMF officials, the Troika, could not find the solution as who will pay this financial gap.

The final decision on the disbursement of  Greek bailout tranche and the method to make the country’s debt sustainable are postponed for November 20th 2012.

Eurogroup chief Jean-Claude Juncker and European Monetary and Economic Affairs Commissioner Olli Rehn praised the Greek government for passing the latest package of fiscal and structural reforms but International Monetary Fund managing director Christine Lagarde suggested that some “chapters” remain to be settled.

“The Eurogroup welcomes efforts by Greek authorities to bring program back on track,” said Juncker. “The Eurogroup acknowledges the considerable efforts of the Greek citizens.”

“All those who openly dismiss the potential of the Greek program to return fiscal sustainability should dwell on the improvement in the country’s structural budget balance,” said Rehn. (read more ekathimerini)

Monday’s eurogroup meeting must have been one of the difficult kinds with EZ and IMF officials and Germans apparently having grave differences on certain issues.

Stournaras and Lagarde

Earlier on Monday evening, some Greek media reported of an adamant Germany insisting of pushing its own terms and conditions and thus despite resistance from the IMF. With Greece being stuck among the two of them and at risk of being crushed.

Germany reportedly was firmly against reductions of interest rates cuts for the money already paid to Greece. The IMF considers it as imperative in order to give a breath to Athens.

Beyond that, Germany went even a step further, thus challenging the Greek common sense: Berlin – or better say Finance Minister Wolfgang Schaeuble, wanted a strict supervision of the Greeks that they would carry out the reforms.

Greek Finance Minister Yannis Stournaras and International Monetary Fund Managing Director Christine Lagarde, Brussels, 12 Nov
  Greek FinMin & the IMF

Meanwhile as parts of the Troika report were published on Greek press it looks as if additional austerity measures of 6.4 billion euro will be needed for 2015-2016. This news must be a shock for Greeks who will get face to face with 13 billion euro austerity 2013-2014.

the relevant austerity bill was voted last Wednesday at the Greek Parliament with Prime Minister Antonis Samaras assuring coalition government lawmakers and the public that “these are the last austerity measures.” But maybe he meant, the last austerity measures this government will take.

Recently Samaras had also said that the country had money until November 16th, i.e. upcoming Friday, and therefore the austerity bill and the Budget 2013 should be adopted by the government in order to receive the bailout tranche.

Samaras will meet with EC President Barroso on Tuesday morning.

Will Greece go bankrupt next Friday without the bailout tranche?

EU Commissioner Olli Rehn insisted that there would be no problems on Friday, when Greece has to rollover 5 billion euros of debt. It is planning to do so by issuing T-bills and Rehn said Greek banks would be in a position to buy them even if they are cut off from the Eurosystem.

PS and I thought Greece had no money to pay wages and pensions. But it was only for 5-billion-euro rollover of debt. Phew!


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