The Greek team goes to Eurogroup with anything but great expectations. The topic “Greece” is third on today’s agenda of the finance ministers of the eurozone. Athens seeks a political solution to the Greek problem and anticipates the meeting between German Chancellor Angela Merkel with the managing director of the International Monetary Fund, Christine Lagarde, on upcoming Wednesday in Berlin.
The eurozone finance ministers will discuss and record the progress in implementing the Greek adjustment program and will seek solutions to break the deadlock and continue with the second review.
If an agreement is reached and the technical teams of the institutions return to Athens, the conclusion of the second review would proceed with fast pace.
But until this happens, the position of the IMF has to be clear.
European lenders insist on the participation of the Fund, the Fund insists on lower primary surplus targets, while both lenders front insist on legislation of additional austerity measures as soon as possible.
Practically, they tell Greece “Legislate additional measures or the second review will not be concluded.”
Although the Greek government has repeatedly said that legislation of measures to be implemented after 2018 was against the Constitution, it seems that Athens is seeking ways to adopt these measures with the less political cost.
Chief of European Stability Mechanism Klaus Regling said on Sunday, “Greece may need less than originally planned ESM funds.”
Greece has used only 32 billion euros from the 86billion loan package of the third bailout agreement.
Regling said the possibility that the International Monetary Fund joins the bailout scheme opens the door for a further reduction.
Greek media report that today’s Eurogroup meeting is not as crucial as it was originally expected to be The next crucial Eurogroup meeting is in March, a couple of days after the elections in the Netherlands.
Greece is right to seek a political solution because it is all about politics and re-elections and new wins.
In Germany, it is the social-democrats of the SPD that guides the agenda, chancellor candidate Martin Shulz warned that “Grexit debate is dangerous.”
In this context we should also see the statement by fiance minister Wolfgang Schaeuble who claimed on Sunday that he “never made Grexit threats.”
In public opinion polls, the SPD and Martin Schulz lead towards conservative CDU, Merkel, Schaeuble & Co who have been worn-out after more than a decade in power.
On the side note: the captain of the airplane the Greek team used to fly to Brussels on Sunday, wished them “Good Luck!”
