Greece failed to receive a fourth €5.7-billion ($7 billion) tranche of bailout funds on Monday, despite a senior EU figure confirming Athens had met “99 percent” of its reform commitments.
However, European mandarins confirmed that work had started on a form of debt relief for the struggling Greek economy.
As expected, a meeting of eurozone finance ministers in Brussels did not release the monies to crisis-hit Greece as two of Athens’ so-called ‘prior actions’ — commitments to reform the country’s economy — remain unfulfilled.
Although both of these — the issue of online auctions and the privatization process of the Hellenikon airport in Athens — are outside the government’s direct control, it is thought more talks will take place to complete the prior actions in the coming week.
However, the funds will likely not be released until mid-March at the earliest, despite any compliance with the final prior-action demands.
European Commissioner for Economic and Affairs Pierre Moscovici confirmed talks teams would return to Athens next Monday (Feb. 26) for more discussions.
He also said that when Greece exited the bailout program in August this year “it must become a normal country in terms of EU procedures and a normal member of the eurozone”.
His comments were echoed by Mario Centeno, Eurogroup president, who tweeted: “The reform agenda should outlive the program.”
The decision came late on Monday evening, on a day when there was also unexpected tension between Greek Finance Minister Euclid Tsakalotos and European Central Bank President Mario Draghi about the online auctions and Athens’ recent bond sales which saw higher-than-expected yields.
Moscovici, speaking later at a news conference, also confirmed work had begun on debt relief for Greece. Centeno said a growth repayment link was being discussed for Greek debt relief.
The possibility of some form of debt relief had increased in recent weeks following the appointment of a Social Democrat finance minister in Berlin, something the Greek government hoped would boost its case for the writing off some debt.