Eurogroup to discuss Greek debt

The Eurogroup will on Monday discuss a compromise on the sustainability of the Greek debt to unblock a second review of the country's bailout plan and pave the way for new payment that Athens needs before July.

The European Commission (EC) and the European Central Bank (ECB) will also inform the ministers of the results of the latest review of the bailout of Spanish banks, which took place on April 26 and 27, Efe news reported.

The institutions noted that economic growth exceeded expectations and that the banks have been complying with capital requirements, but warned that delinquency is still high and some of the banks need to improve their balance sheets.

The Eurogroup, consisting of economy and finance ministers of the Eurozone, called the tone of the report very positive and emphasised that the fact that there are banks that need to expand their capital for the future does not imply they are not meeting present requirements.

It also ruled out that Brussels was concerned about the situation of Spain's People's Bank.

Meanwhile, Athens and the creditors are near to closing the second review of the bailout after the Greek parliament approved this week -- amid widespread protests in the country -- the reform package agreed in April, which includes pension cuts and tax hikes equivalent to 2 per cent of the Greek GDP.

However, the fiscal path to be followed by the country after the end of the bailout in 2018 and the debt issue remain to be closed.

A senior European official said agreeing on the first point should be relatively easy, and added Greece would be required to achieve a primary surplus of 3.5 per cent of GDP at the end of the bailout and sustain it for less than ten years, as required by the International Monetary Fund (IMF).

The stumbling block will be on the issue of debt, where institutions like EC, ECB, European Stability Mechanism, IMF and countries differ as to whether the medium and long term relief measures already planned since 2016 are sufficient or if they should be further expanded to provide guarantees on the viability of Greek debt in the future.

Finally, the ministers will discuss spring economic forecasts presented on May 11 by the EC and on the evolution of inflation in the eurozone.

--IANS

ksk/dg