Cyprus Mail

Eurogroup head: agreement with Greece on many issues, progress assessment Tuesday

Dutch Finance Minister and Eurogroup chairman Jeroen Dijsselbloem

By Jan Strupczewski

Greece and its euro zone creditors have reached an agreement on many, but not all, issues in the reform programme that Athens is implementing in return for loans, the head of euro zone finance ministers Jeroen Dijsselbloem said in a statement on Sunday.

Greece needs a positive review of its reform progress from the euro zone to get the next, 2 billion euro tranche of loans as well as up to 10 billion euros for the recapitalisation of its banks.

But talks, which should have been completed by the middle of October, have stalled because of differences over details of a foreclosures law.

“I welcome that good progress has been made between the Greek authorities and the institutions in the discussions on the measures included in the first set of milestones and on the financial sector measures that are essential for a successful recapitalisation process,” Dijsselbloem said.

“Agreement has been reached on many issues,” he said.

He said deputy euro zone finance ministers, called the Euro Working Group (EWG) would meet on Tuesday to take stock of the situation and decide if a disbursement is possible.

A euro zone official said the foreclosures law was still one of the remaining stumbling blocks. Athens and euro zone creditors differ over the level of protection required for poorer families in danger of losing their homes.

Euro zone officials believe Greek proposals are too generous, but for the left-wing government of Alexis Tsipras, the problem is highly sensitive politically at a time when Athens is to provide food and housing for thousands of asylum-seekers under a plan to handle the EU’s migration crisis.

Greek officials say a wave of evictions under a less generous law could boost support for the far-right Golden Dawn party and depress property prices as auctioning off of homes begins, further diminishing the value of mortgage collateral for banks.

But Dijsselbloem said last week the passing of the foreclosures law was key before banks could be recapitalised, because it had a direct impact on the number of bad loans that banks would have to deal with through recapitalisation.

“They are trying to finalise the whole package later today, otherwise tomorrow,” the euro zone official said.

“After stock taking in the EWG, in principle the ESM (European Stability Mechanism) board of directors can decide on disbursements,” the official said.

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