GREECE - EUROGROUP

Yesterday’s Eurogroup approved the conclusion of the fourth review, with the relevant disbursement of funds, further debtrelief measures and the post bail-out mechanism. Accordingly, 1) Greece will receive EUR 15bn as a last tranche of the current bail-out, 2) get a 10-year extension for the repayment of EFSF loans and an additional grace period of 10 years on interest payments and 3) it has committed to continue its structural reform agenda and achieve a primary surplus target of 3.5% (of GDP) until 2022 and then a 2.2% primary surplus on average, from 2023 to 2060.  

Reportedly (Bloomberg), Eurogroup head Centeno said for the Greek debt deal “after eight long years Greece will finally be graduating from its financial assistance”. On his part, MoF Tsakalotos said that the government was satisfied with the Eurogroup agreement, noting that that the debt was now viable, allowing access to the markets. IMF MD Lagarde also expressed a general satisfaction, noting that there was full confidence for the medium-term debt sustainability which would put Greece in a position to access markets, retaining however reservations for the longer-term, despite serious commitments from Eurozone partners. Finally, ECB head Draghi welcomed the adoption of the set of debt measures agreed as they improve debt sustainability in the medium term as well as Eurogroup’s readiness to consider further debt measures in the long term in case adverse economic developments were to materialise.