Ecofin meets as Greece debates price of bailout payment

Euro zone finance ministers gather in Brussels Monday for a eurogroup meeting on Greece as the Greek parliament prepared to vote on a package of measures designed to unlock the next tranche of bailout money.

Minister for Finance Michael Noonan, who was reappointed by Taoiseach Enda Kenny on Friday, will join colleagues from across the euro zone for the specially-convened meeting on the Greek bailout.

As the 300-member Greek parliament prepared to vote on a package of measures last night in Athens, demonstrations took place in the Greek capital.

Among the measures being proposed are fresh cuts to the pensions of current pensioners and increased social security contributions by workers.

The measures are part of a €5.4 billion package needed to unlock the second tranche of funding under Greece’s €86 billion bailout, its third international rescue programme. The first review under that programme has yet to be completed, six months after its initial projected completion date.

In addition to the €5.4 billion package, the eurogroup is considering a list of extra measures to be taken in the event that Greece misses its budgetary targets for 2018, amid disagreements between the IMF and Greece’s European lenders about the growth projections for Greece in the coming years. While the European Commission predicts that Greece will deliver a primary surplus of 3.5 per cent by 2018, the IMF believes that the current measures will only yield a surplus of 1.5 per cent.

Monday’s meeting had originally been expected to take place 10 days ago, but was postponed as negotiations stalled in Athens.

In a sign of growing frustration with the pace of the bailout talks, the IMF wrote to all euro zone capitals late last week calling for debt relief for Greece to be discussed immediately.

IMF participation is seen as essential for many euro zone countries, including Germany, if they are to participate in the third Greek bailout.

In an interview with German media on Sunday, European Commission president Jean-Claude Juncker said that Monday’s eurogroup meeting would “start the first discussions about how to make Greece’s debt sustainable in the long term”.

He also said that Greece had “basically achieved” the reforms demanded by creditors.

With Greece facing €10 billion in debt repayments in June and July, the government of Alexis Tsipras is under pressure to unlock the next tranche of bailout funds.

Fearful of a repeat of last year’s bitter bailout negotiations, EU officials have also privately warned Athens that discussions need to be concluded by the end of May before the British referendum on EU membership on June 23rd.

In a sign of continuing public dissatisfaction with demands for more austerity measures more than six years after Greece became the first euro zone country to seek a financial bailout, Greece was hit by a series of unofficial strikes in recent days. Workers in the civil service, transport and media sectors staged a 48-hour strike on Friday and Saturday, in addition to a planned strike scheduled for Sunday.

The Greek Parliament held two days of debate on the austerity package being proposed ahead of Sunday night’s vote. Together with its coalition partner, Mr Tsipras’ Syriza-led government holds 153 of the 300 seats in the Greek Parliament.

The Greek Prime Minister came to power in January 2015 on a promise to end austerity in Greece, but was forced to sign up to a third bailout programme for the indebted country last summer.

The IMF has been leading calls for debt relief for Greece, but the country’s euro zone lenders, including Germany are less keen, arguing that only a limited form of debt restructuring is permissible.