New de­lay for tranche pay­ment

A num­ber of prior ac­tions re­main un­ful­filled, mak­ing the timetable for the in­stall­ment par­tic­u­larly tight


A fur­ther de­lay is ex­pected in the dis­burse­ment of the bailout in­stall­ment from Greece’s cred­i­tors be­cause some of the prior ac­tions re­quired have yet to be ful­filled, as the Euro Work­ing Group re­al­ized last Thursday.

There­fore, while the gov­ern­ment is sound­ing tri­umphal­ist over the de- ci­sions of the June 15 Eurogroup, it has al­lowed the tranche pay­ment to be de­layed un­til the last minute be­fore the date the July obli­ga­tions are due. It may have voted for pen­sion cuts and tax dis­count re­duc­tions to­tal­ing 4.5 bil­lion eu­ros, but it has got stuck on spe­cific reg­u­la­tions that carry some spe­cial po­lit­i­cal weight.

Sources say that in­stead of the de­ci­sion that was to be made on Thursday, July 6, the Euro­pean Sta­bil­ity Mech­a­nism will in­stead have to de- cide on the ea­gerly an­tic­i­pated dis­burse­ment a week later, on July 13 or 14. Greece has to pay pri­vate bond­hold­ers 2 bil­lion eu­ros on July 17, another 290 mil­lion eu­ros to the In­ter­na­tional Mon­e­tary Fund, and some 4 bil­lion eu­ros to the Euro­pean Cen­tral Bank on July 20. The tranche will amount to 7.7 bil­lion eu­ros, with another 800 mil­lion due to be dis­bursed in the fall.

The ESM will con­duct two con­fer­ence calls to­mor­row: The first con- cerns its Board of Gov­er­nors with the par­tic­i­pa­tion of the eu­ro­zone fi­nance min­is­ters, who are ex­pected to adopt the sup­ple­men­tary bailout agree­ment, while the sec­ond is that of the Board of Di­rec­tors with the par­tic­i­pa­tion of the Euro Work­ing Group mem­bers, orig­i­nally sched­uled to au­tho­rize the dis­burse­ment of the 7.7 bil­lion.

The pay­ment of the tranche has been de­layed be­cause the fol­low­ing prior ac­tions re­main pend­ing: the is- 1.1369 sue of a le­gal opin­ion on whether the re­duc­tion of pen­sions from 2019 is com­pat­i­ble with the Greek Con­sti­tu­tion, a min­is­te­rial de­ci­sion to de­ter­mine the ex­act streets where stores can open ev­ery Sunday from May to Oc­to­ber, and the adop­tion of a le­gal clause re­lated to the lib­er­al­iza­tion of the en­gi­neer­ing pro­fes­sion. The IMF in­sists these three ac­tions specif­i­cally must be com­pleted be­fore it will pro­pose to its board that it should par­tic­i­pate in Greece’s new pro­gram.

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