As Greece’s exit from creditor control looms, clarity is in short supply

On the eighth anniversary of the eurozone’s biggest bailout, Greece is closer than ever to breaking free from its creditors’ oversight and trying its luck raising money on its own.

But, as August 20 – its exit day – nears, clarity is in short supply, feeding uncertainty over how easily Athens can return to normalcy.

Here are just some of the looming questions that will determine the day after for Greece: Will Greece get debt relief? A The eurozone has agreed to ease the terms Greece faces on some of its €320 billion (Dh1.4 trillion) of debt, but key areas of contention between the country’s creditors persist.

Chief among them are which loans will be restructured, what will be the path of the primary surplus – which excludes interest payments – and, crucially, whether debt relief will be granted upfront and unconditionally, or over time and with strings attached.

Creditors led by Germany favour the latter, while others, including the International Monetary Fund, the European Central Bank and France argue that to be credible, relief must be granted at the end of the bailout and without conditions.

How closely will Athens be monitored?

While Greece has made clear it wants a clean exit when its bailout expires in August, its huge debt load means it’s bound to be under close surveillance for a while.

This will be tighter than what’s in place for countries like Portugal and Ireland and will include regular audits, though it’s not yet clear how it will be linked to discipline from Greece’s end. Still, a strong framework that keeps Greece on its toes is key for its return to the markets, ECB executive board member Benoit Coeure said last month.

Will the IMF be involved? The IMF co-financed Greece’s first two bailouts but has refrained from participating in the third one, saying the euro zone first needs to ensure that the country’s debt – currently at around 180 per cent of gross domestic product – is sustainable. While it seems odd to discuss the Washington fund’s participation in a lifeline set to expire in three and a half months, the IMF’s seal of approval remains key for two reasons: policymakers in hawkish countries such as Germany are loathe to greenlight more loans without the IMF lending the bailout its credibility, and the fund’s participation would mean it deems Greek debt to be sustainable, an important acknowledgement in the eyes of investors.