Moscovici: Greece on the right track, must build success story

European Commissioner for Economic and Financial Affairs Pierre Moscovici on Monday said the European Stability Mechanism (ESM) Board of Governors had decided to disburse 1.1 billion euros of loans to Greece, linked to the first review. He said the decision was based on the compliance report prepared by the European Commission and the other institutions, showing that Greece had completed all remaining milestones.

"Today's decision to disburse 1.1 billion is an important step in this heavily front-loaded programme and it also opens the door for the second review of the programme to start," he said. "I am happy that we have reached this point and we must absolutely go on, as I said, to try to build a 'success story' with Greece now. We are on the right path," the Commissioner added.

He noted that these milestones included reforms on a number of key issues, including pensions, bank governance, energy, privatisation and others, covering all parts the Greek economy, and he thanked Finance Minister Euclid Tsakalotos and Greek authorities for their efforts to complete this work.

"The measures will lead to budget savings of about 3 pct [of GDP] between 2016 and 2018," he said, adding that he shared the view of Eurogroup President Jeroen Dijsselbloem about the state of the Greek economy. "We have quite good news from growth and also fiscal execution."

Moscovici also welcomed the significant progress that has been made in arrears, noting that this "must and will continue" since it was critical for relieving pressure on the real economy in Greece.

He announced that teams from the institutions will return to Athens in October to start the technical work of the second review, which will move the focus from legislation to implementation of the reforms.

ESM chief Klaus Regling explained that the Eurogroup's decision had approved the disbursement politically and that the official decision for the disbursement of the 1.1 billion euros will be taken at the next ESM Board of Directors meeting in two weeks, on October 24. Regarding the remaining 1.7 billion euros, Regling said that this could possibly be disbursed at the same time, provided the institutions have received the missing data for September, showing that the target for net arrears clearance has been met.

He said that Greece had submitted figures for July and August showing that the 1.8 billion euros ear-marked for arrears clearance has been fully used for the purpose intended.

"For net clearance we need to know whether there have been any new arrears accumulating so that is what we are waiting for," he added.

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