BRUSSELS – Frustrated that talks with lenders over unfinished reforms have gone on for nearly six months, Eurozone finance chiefs pressed Greek Finance Minister Yannis Stournaras to make a deal by March 14 so that they can release a long-delayed nine billion euros ($12.46 billion) installment.
And while praising Greece publicly for making progress on reforms, they privately told him they are disappointed at the lack of progress with some 153 major changes still undone.
During the meeting, Stournaras’ collegues were said to have expressed disappointment at the lack of progress with structural reforms, although they recognized that Greece was now on much sounder ground fiscally, but still squeezed him, the newspaper Kathimerini said it was told by sources it didn’t name.
Eurogroup chief Jeroen Dijsselbloem had stressed before the meeting the need for Greece and Troika to conclude the review, which has dragged on for more than six months as the two sides can’t agree on 153 unfinished reforms that is holding up release of a nine billion euro installment.
“It is important for us, and especially for Greece, that the Troika and the Greek government arrive at an agreement very soon,” he said.
Envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) have been frustrated in attempts to get any agreement as the government has gotten its back up because it now says it will enjoy a 1.5 billion euro primary surplus and doesn’t have to relent to every demand.
The government is also under pressure from the Troika to submit to Parliament a new legal framework governing the recapitalization of Greek banks.
The new law would allow the bank recap fund, the Hellenic Financial Stability Fund (HFSF), to sell shares it has acquired in Greek lenders at a lower price than had been initially planned.
The HFSF argues that it will make up any shortfall because the remainder of the bank shares it holds will increase in value if Greece’s four systemic banks – Piraeus, National, Alpha and Eurobank – are recapitalized with private funds, particularly if they come from abroad.
That’s being opposed by the major opposition Coalition of the Radical Left (SYRIZA) which doesn’t approve of selling bank shares at lower prices and said it would question the stress test results published by the Bank of Greece last week, which put Greek banks’ total capital needs at 6.4 billion euros.