Bailout surveillance mechanism

The post bailout surveillance mechanism that will be agreed at Thursday’s Eurogroup will commit Greece to the continuation of reforms in six key areas until 2022, namely: a) fiscal with a focus on achievement of 3.5% primary surplus target, containment of state arrears and introduction of tax reforms on property,  b) social security and health sector, c) financial sector with the focus on NPLs reduction, d) labour and product markets, including the restructuring of the electricity market operation, e) privatizations, monitoring progress on TAIPED’s updated plan, f)  public administration. The document also foresees quarterly reviews by current creditors (including the IMF even if it has only an advisory role) after which they will prepare a compliance report on the basis of which there will be a decision on whether there will be a release of debt relief measures which however will be constrained to disbursements from the profits that euro-area central banks made on their Greek bonds portfolio (the disbursements could take place in equal annual tranches of approximately EUR 1.2bn in June each year, or could be split in two semi-annual sub-tranches in June and December) and the elimination of an interest-rate penalty charged on some bailout loans.  

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