Staikouras will brief Eurogroup and IMF and then send letter to ESM

Staikouras will brief Eurogroup and IMF and then send letter to ESM

The plan developed by SYRIZA during its governance period is being actualized. The issue is expected to be raised by Finance Minister Christos Staikouras during the Eurogroup meeting in Helsinki next Friday.

Later on, letters – requests to ESM and EFSF will be sent, with the whole process – which will eventually get the “green light” by Eurogroup- expected to last approximately 2 months. According to Treasury officials, a purchase of a 2.9 billion-euro loan (at a 5.13% interest rate) will be required, in order for the weighted average interest rate to the Fund to be reduced below 3%.

Meetings

In the meantime, Mr. Staikouras is expected to brief his counterparts on the key points of the government’s economic policy, while on the occasion of the Eurogroup meeting the finance minister will have contacts with head of ESM Klaus Regling, president of Eurogroup Mario Centeno, Vice-President of the Commission Valdis Dombrovskis and Commissioner for Economic Affairs Pierre Moscovici.

Preparations

It is worth noting, however, that the SYRIZA government had not only announced the goal of repaying the expensive IMF loans, but had also completed the steps that were needed to achieve that goal.

In particular, former Finance Minister Euclid Tsakalotos, during an IMF spring meeting last April, had briefed then head of IMF Christine Lagarde on the government’s intention to repay IMF loans early, and she had welcomed such an occasion, while Berlin had responded the same way.

During that month, the SYRIZA government had also formally filed a request for repayment to ESM, while also presenting the request to the EuroWorking Group, which had given it a ‘green light’.

The gradual withdrawal of the International Monetary Fund from Greece was part of a package of medium-term Greek debt measures agreed at the May 2016 Eurogroup under the SYRIZA government. The first measure provides for the repayment of IMF loans with money from ESM, as the interest rate of the Fund is higher than that of ESM. /ibna