Eurogroup approves Greece-Creditors staff level agreement

by Aggelos Skordas

The Eurogroup approved on Monday the staff-level agreement (SLA) between Greece and the quartet of its creditors (the European Commission, the European Central Bank, the International Monetary Fund and the European Stability Mechanism), who recently returned to Athens to resume talks regarding the ongoing third evaluation of the Greek bailout program. Eurozone finance ministers approved the SLA (reached on Saturday between Greek authorities and the creditors’ missions) within minutes after what is seen as the briefest discussion regarding crisis-torn Greece in the last few years.

Outgoing Eurogroup President Jeroen Dijsselbloem expressed satisfaction that a SLA on Greece has been achieved promptly characterising it as “exceptional”.

“Today we will discuss the following steps,” he added. Regarding the disbursement of the remaining 5.5 billion euros instalment to Greece, he explained that the necessary procedures in national parliaments and the European Stability Mechanism’s (ESM) decision on the amount of the installment would be prioritised. As he said, it is too early to discuss whether the amount would be allocated to one or more installments. At the same time, European Commissioner for Economic and Financial Affairs Pierre Moscovici said the timely technical agreement is an encouraging message and very good news in view of the program’s completion in less than nine months, as well as ahead of the crucial discussions over the post-memorandum supervision and the debt relief “to be completed early in the summer”.

Moreover, in a statement issued by the European Stability Mechanism (ESM) it is highlighted that the total package of the measures would reduce Greece’s debt-to-GDP ratio by about 25 percent by 2060. The package consists of three measures: The smoothing of Greece’s payment profile (completed early in 2017); reducing Greece’s interest-rate risk (funding for this is complete); matching long-term funding transactions to future loan disbursements (to be implemented in 2018).

All measures have yet to be voted in time so that the next Eurogroup meeting, scheduled for January 22, 2018, also concludes the political agreement on the disbursement of the 5.5 billion euros installment. Greek Finance Minister Euclid Tsakalotos has set the goal of closing the fourth evaluation between May and June 2018. As he said following Monday’s Eurogroup, on January 22, the debt relief process, the fourth evaluation and the exit from the program will begin.

It should be noted that Monday’s Eurogroup meeting elected Mario Centeno, Minister of Finance of Portugal, as the next President of the body. The new President will take office as of 13 January 2018 and will serve a two and a half year term, replacing Dutch Jeroen Disselbloem, who congratulated his successor with a tweet.