BRUSSELS—The eurozone’s 19 finance ministers will be looking to defuse the risk of another Greek crisis as they try to agree Monday on what reforms Greece must still take to qualify for more loans.
Hopes of an imminent breakthrough that will unlock further bailout funds for the cash-strapped country were dashed in recent weeks due to disagreements between Greece and its creditors.
Greece remains dependent on bailout loans from its partners in the eurozone to pay its debts. It has a debt repayment hump in July, and without new loans, it faces bankruptcy and a potential exit from the euro.
Ahead of the meeting in Brussels, the eurozone’s top official, Jeroen Dijsselbloem, said he hoped there will be agreement on sending back to Athens representatives from the institutions overseeing Greece’s bailout back to Athens. Once there discussions will commence on what further reforms Greece will have to undertake in order to get its hands on more bailout money.
“We’ve had intense talks with the institutions and the Greek government to clear the ground for the mission to return to Athens and in the eurogroup we will discuss whether we’ve come to that point,” he said. “Because that is my goal: to get the mission back in Athens on the ground to talk about all the difficult stuff that needs to be sorted out.”
As part of its most recent bailout agreement struck in July 2015, Greece committed to a series of economic reforms in return for the loans. There are a number of reforms still to be carried out, including to pensions, tax and the labour market.
Agreeing on the next set of reforms will unlock the next batch of funds and potentially trigger the involvement of the International Monetary Fund in the Greek bailout program.
The IMF was meant contribute to the latest bailout program but has held off, saying that Greece’s debt is unsustainable and the eurozone needs to write off some of its loans. The Europeans are hesitant, leaving the IMF’s position in the balance.
“The position of the IMF remains unchanged under the principle that they formally want to join this program, while informally, they continued to be involved,” Dijsselbloem said. “It is still their intention but their condition is that there are enough substantive reforms — not necessarily cuts, but reforms — so that things improve in Greece.”
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