Eurogroup deputy: ‘Grexit is a non-issue’

Eurogroup Working Group President Thomas Wieser [EU2016SK/ Flickr]

Eurogroup Working Group President Thomas Wieser told EURACTIV Germany that he remains confident the IMF will participate in the Greek bailout programme and that ‘Grexit’ is not even an issue.

Thomas Wieser has been president of the Eurogroup Working Group since 2012. It is an advisory body made up of representatives from the Economic and Financial Committee, the European Commission and the European Central Bank.

The spectre of Grexit (Greece’s withdrawal from the eurozone) has reemerged. Among others, potential next US ambassador to the EU Ted Malloch has predicted it. Is it really a risk?

I would pay little attention to the statements issued by the United States’ possible new ambassador. The fact is, the so-called second review (of the bailout programme) has been going on for a while. And the fact is that the International Monetary Fund (IMF) has come out with a negative appraisal of Greece’s debt sustainability. There are different opinions: the Anglo-Saxon world tends to agree with the IMF, but the rest of Europe sees it very differently, as Greek growth has clearly been positive.

Tax revenue has increased so much that a primary surplus of between 2 and 3% is on the cards, while over 3% is predicted for 2018. Even though these are preliminary figures, such a negative review of its debt development is just following old trends.

It hasn’t been enough to convince the IMF and bring them onboard the current bailout programme, though. From a German point of view at least, the fate of the programme relies on it…

It is essential for many countries that the IMF has its own dedicated programme for Greece. The outlooks of the four involved institutions, the European Commission, the European Central Bank, the European Stability Mechanism and the IMF, have to be largely congruent.

Syriza MEP: EPP tried to 'sabotage' Greek bailout debate in EU Parliament

The right-wing European People’s Party attempted to “sabotage” a debate today (14 February) on the Greek bailout in the European Parliament in the absence of Eurogroup president Jeroen Dijsselbloem, who cited a “heavy workload”, Syriza MEP Dimitris Papadimoulis claimed.

But the fact remains that the IMF wants more debt relief for Greece and that the eurozone is unwilling to comply.

No. There was an agreement in May 2016 that set out what debt relief would be made in the short-, medium- and long-term. We have already implemented the short-term measures via a reduction of long-term Greek debt by 20% of GDP.  At the end of the programme, in 2018, if necessary, other measures will follow…

So there won’t be any further discussion about more debt relief or haircuts in one way or another?

No, it will be more a case of discussing the details and arrangements of what has already been agreed. The major difference between the European institutions and the IMF is in their assessments of the medium-term fiscal packages.

Is Grexit not an option?

In our circles, no one thinks that would solve anything. No one wants it and it’s not feasible or advisable. It’s a non-issue.

Lenders agree on more austerity for Greece to avoid default

Eurozone and IMF officials met with Greek Finance Minister Euclid Tsakalotos this afternoon (10 February) to overcome the stalemate in the bailout programme after the lenders agreed to request an additional €3.6 billion in cuts by 2018.

Does the agreement with the IMF have to be finalised before the next meeting of the EU’s finance ministers next week?

Next week might come too soon for every ‘i’ to be dotted and every ’t’ to be crossed. I would be very happy if significant progress with the Greek government is made by that point. It might be the case that the agreement is ready by the meeting after, in March.

Are things going to be even more difficult because of the Dutch elections on 15 March?

The debate is difficult in any case. But the Dutch Constitution says that there will be no problems even after the elections if the Greek programme sticks to the parameters that have already been agreed.

When does the deadline for an agreement run out? Before France’s elections in April or after the summer, when the next scheduled repayment is due?

The real time pressure is dictated by what damage further delay will do to the Greek economy. Growth, private investment in companies and private consumption are all at stake.

ECB's monetary policy under attack, Brexit scavengers continue to circle UK

The European Central Bank (ECB) is under increasing pressure to exit its loose monetary policy but the Frankfurt bank remains unconvinced by inflation growth. The institution is also looking into cross-border bank mergers, as the rest of Europe eyes the UK’s post-Brexit scraps.

But if the IMF doesn’t come on board then the bailout programme is scuppered and a new one will have to be set up. That would be a long process, no?

There are plenty of indications from IMF chief Christine Lagarde that they are still determined to participate in the Greek programme. There’s no reason to doubt it now.

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