The troika, or ‘institutions’ as they’ve been eloquently reworded, are back in Athens today in the hope of reaching a staff-level agreement within two weeks with Greek authorities in their pursuit to finalise the country’s fiscal programme.
European Commission spokesman Margaritis Schinas said the European Commission welcomes the "understanding" reached by the four institutions last week, which allows their return to Athens.
The four mission heads must sign a staff-level agreement with the Greek authorities on, firstly, all remaining prior actions for the second review, including labour market reforms, and secondly, on the package of additional measures for 2019-2020. This package will include 'austerity measures,' such as tax and pension reforms, but also the positive measures that will support growth in Greece.
Sources have suggested that the IMF's intention is to participate in the Greek programme but the problem remains whether the Eurozone will be able to provide the "clarifications" it is demanding on the medium-term measures to ease Greek debt.
However, German press reports suggest that there might be some flexibility on the debt issue following a meeting with IMF’s Lagarde and the German Chancellor.
The European Central Bank, on its part, has clearly indicated that it will be in a position to buy Greek debt - and allow Greece to join the quantitative easing programme - if there is an agreement with the creditors that also includes the IMF. The ECB will also carry out its own debt sustainability analysis before making any decision and has thus aligned itself with the IMF's position in seeking clarifications on the proposed medium-term measures for Greek debt.
Subject to the agreement signed, the Eurozone will then begin negotiations with the IMF to decide on the size of the primary surpluses that Greece must achieve after 2018 and for how long, as well as to arrive at a compromise with the IMF on the medium-term measures for easing Greece's debt.
