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Eurogroup will discuss the future exit of Greece from the program of external financial aid

Eurogroup will discuss the future exit of Greece from the program of external financial aid

24 May 2018
Tags: Greece, Economy, Eurogroup, EU

The Council of Ministers of Finance of the euro area (Eurogroup) will discuss the situation in Greece at the meeting of 24 May in advance of its withdrawal from the external financial support program, the Eurogroup said.

External financial assistance to Greece was launched in 2010 and one of its objectives is to return the country to full and independent financing of its needs in the capital markets, without credit support from the IMF or the stabilization fund of the eurozone. The first two programs did not achieve this goal definitively and, consequently, they had to be supplemented with new assistance packages. Now there is a third assistance program and, as the EU hopes, it will be the last one and will end in the originally scheduled time - in August this year.

As part of the current financial assistance program, Greece has been granted loans only by the European Stability Mechanism (ESM), the country has received less than 40 billion euros with a total program volume of at most 86 billion euros.

Greek question

One of the items on the agenda of the Eurogroup is the "Greece adjustment program", which is being implemented as part of the financial assistance package. The so-called institutions - representatives of the European Commission, the ECB, the IMF and ESM - regularly assess the implementation of the requirements of this program by Greece, which often include reforms. If the country fulfills them, it receives portions of financial support credits. Approves the allocation of funds Eurogroup based on the assessment of institutions.

> Important agreements were recently reached within the framework of, as expected, the last (fourth) assessment of the fulfillment of the program's requirements by Greece.

"Greece's Institutes and Finance Minister Euclidis Cakalotos will inform the Eurogroup about the status of the forthcoming fourth assessment of Greece's economic adjustment program and will present an agreement concluded by the institutions and authorities of Greece on 19 May 2010. Greece intends to implement the required measures (within the framework of this program - ed.) Prior to the meeting of the Eurogroup 21 June this year, "- said in the materials for the upcoming Council of Ministers.

Therefore, this discussion can open the way for a new and, as expected, the last tranche of a loan from a financial aid package for Greece. As previously reported by a source familiar with the question, the size of this tranche will also be discussed at the Eurogroup. It is possible that the country will receive the last portion of the loan in June.

It is assumed that this tranche will allow Greece to build up a financial safety cushion, or so-called buffer, to cover risks when it exits the foreign financial aid program.

The Eurogroup at the meeting on Thursday will continue discussing the strategy in the field of public debt in Greece. Some measures to ease the debt burden on the country can be undertaken as part of its exit from the external financial assistance program to make Greece's debt more sustainable.

Other matters

Eurogroup plans to discuss the economic situation in the euro area, where economic growth continues, based on the latest forecast of the European Commission.

In addition to the meeting in the format of the finance ministers of the 19 countries of the eurozone, a meeting of the heads of the ministries of all 27 countries of the European Union is expected on Thursday, among which are those who can join this currency bloc in the future.

It is planned that the discussion will go on continuing the formation of the banking union in the EU and the reform of the ESM, from which the European Monetary Fund was proposed to be a counterpart to the IMF.

Maria Knyazev
RIA News
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