Greece doesn’t appear to have done enough to convince its European creditors to release the 2 billion euros ($2.2 billion) it’s due from its financial rescue package.
Following a period of relative calm in its debt crisis, Greece is facing pressure to deliver on reforms to get the next installment from its bailout program, agreed on this summer.
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Though the Greek government was praised for its recent economic reform efforts, the eurozone’s 19 finance ministers arriving for a meeting Monday say a few issues still needed to be dealt with before the money can be released.
Jeroen Dijsselbloem, the eurozone’s top official, says the government of Prime Minister Alexis Tsipras has done a lot of what was asked for in the 86 billion-euro bailout deal, but some reforms remain to be completed.
He adds it was urgent to pass the remaining reforms and release the new bailout money, because only then can the creditors move on to other big issues, such as recapitalizing Greece’s ailing banks and start discussing debt relief.
As a condition of July’s three-year 86 billion-euro ($96 billion) bailout agreement — the country’s third since 2010 — Greece has to enact a series of measures to overhaul its economy, such as reforming its labour markets, raising taxes, cutting spending and putting state investments up for sale. If it doesn’t, Greece would be cut off from its bailout funds and would again face the prospect of bankruptcy and an exit from the euro.
One of the main issues now holding up the payout of the latest installment centres on how to deal with people deep in arrears on their mortgages.
“We need to complete that first set of milestones,” Dijsselbloem says. “It needs to be done very quickly.”
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Greece has relied on bailout funds from its eurozone partners and the IMF since the spring of 2010, and is heading back into recession after the government imposed painful controls on money transfers in late June, when it appeared the country was heading out of the euro.
Pierre Moscovici, the European Commission’s top economy official, says the Greek government’s recent moves were positive but that there’s still a way to go. :We are not yet completely there but I’m hopeful and confident that with the spirit of compromise that we have, with the good co-operation with the authorities, we can make it — if not today in the days to come.”