Re­cap key to next dis­burse­ment

Euro Work­ing Group will to­day ap­prove a list of al­most 50 prior ac­tions for the re­lease of 3 bln eu­ros

Kathimerini English - - Focus - BY ELENI VARVITSIOTIS

BRUS­SELS – Bank­ing re­forms that are nec­es­sary for the sec­tor’s re­cap­i­tal­iza­tion are key to the dis­burse­ment of the first cou­ple of bailout sub­tranches, say sources in Brus­sels, as the Euro Work­ing Group is set to con­vene to­day to draft the list of prior ac­tions re­quired from Athens.

Now that there is no press­ing need for Athens to pay any dues this fall, the cred­i­tors are us­ing the ur­gent need for the bank re­cap to pres­sure Greece to pro­mote re­forms.

A Euro­pean of­fi­cial ex­plained to jour­nal­ists yesterday in Brus­sels that although the re­cap process is not con­nected with the first tranche, it would be wise for the Greek side to com­plete all the prior ac­tions re­lated to the credit sec­tor in time for the sec­ond sub­tranche of 1 bil­lion eu­ros. That will be the fi­nal dis­burse­ment from the pack­age of 26 bil­lion ap­proved in Au­gust for pay­ment to Athens as part of the third bailout of 86.6 bil­lion.

This is set to fol­low the im­ple­men­ta­tion of the prior ac­tions for the first sub­tranche of 2 bil­lion eu­ros – while the prior ac­tions for the sec­ond will likely be more painful. “Un­less those bank­ing prior ac­tions are im­ple­mented, there can be no dis­burse­ment for the re- cap­i­tal­iza­tion of banks, a Euro­pean of­fi­cial told Kathimerini.

In prac­tice, the eu­ro­zone is lean­ing on Athens to com­plete its re­form list or face the risk of a bank bail-in from Jan­uary, which would mean a hair­cut on de­posits of 100,000 eu­ros and over.

The list of prior ac­tions to be ap­proved to­day by the EWG will be very long, con­tain­ing just un­der 50 mea­sures, says a Euro­pean of­fi­cial who has seen it.

1.1153 Some of those mea­sures are due by Oc­to­ber 15 while oth­ers should have been im­ple­mented by Septem­ber 15. “Now, due to the de­lay from the elec­tions, all mea­sures must be passed by mid-Oc­to­ber,” he said.

Dis­cus­sion on Greece will con­tinue on Mon­day at the for­mal Eurogroup meet­ing, where Fi­nance Min­is­ter Eu­clid Tsakalo­tos will present the strate­gies of the newly formed Greek gov­ern­ment.

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