Main questions on Greece draft deal at Eurogroup meet
(BRUSSELS) - Eurozone finance ministers were scheduled Friday to go over a new bailout programme in return for reforms by Greece, but some of the creditors feel Athens' pledges are not precise enough.
Here is a list of the main questions that still need to be discussed, according to a working document obtained by AFP which will serve as a basis for the discussions and which contain many of the reservations previously raised by Berlin.
- DEBT SUSTAINABILITY
"Debt sustainability is one of the most important open issues," the document said, since Greece's financing needs "are higher than expected."
The International Monetary Fund, one of Greece's main creditors alongside its European partners, has made it clear that it will only take part in financing the deal if the Europeans take a decision on some sort of relief on the Greek debt of which they are the main holders.
But Germany is adamant on the one hand that the IMF must be part of the deal, while insisting on the other that there will be no "haircut" or partial writedown of Greece's debt. The debt currently totals around 320 billion euros, equivalent to 170 percent of gross domestic product (GDP) and will rise to 200 percent next year.
The document insists that Athens must be more precise about how it aims to reduce its debt and its current memorandum of understanding is "not yet compliant" with creditors' expectations.
- PRIVATISATION FUND
In July, Athens promised to scale up its privatisation programme and transfer valuable Greek assets to an independent fund that will monetize the assets through privatisations and other means. The aim is to raise 50 billion euros across the length of the third bailout programme.
Under the memorandum of understanding, Athens has promised to appoint an "independent Task Force to identify options and prepare recommendations ... on the fund to be created" by October.
But some creditors believe that "just to set up a task force is not sufficient" and the memorandum was therefore "not yet compliant" with creditors' expectations.
- FISCAL TARGETS
At the euro summit in July, it was agreed that Greece must turn in primary surpluses of 1.0 percent in 2015, 2.0 percent in 2016, 3.0 percent in 2017 and 3.5 percent in 2018.
But under the memorandum of understanding, those targets have been substantially reduced and Athens is pencilling in a primary deficit of 0.25 percent in 2015, followed by primary surpluses of 0.5 percent in 2016, 1.75 percent in 2017 and 3.5 percent in 2018.
"No measures have been defined yet to fill in the gap up to 3.5 percent of GDP," the document stated, classifying the memorandum as only "partially compliant".
- REFORM OF PUBLIC ADMINISTRATION
The document charged that Athens was only "partially compliant" because it had "weakened" the summit language and not yet drawn up any concrete plan for reforming Greece's public administration or any plan for further cost reduction.
- REFORM STRATEGY
More generally, at the Euro summit, Greece's partners insisted that Athens must "seriously strengthen" its reform plans, offering a "satisfactory clear timetable for legislation and implementation."
But the working document complained that there was still "no full clarity on the direction of policies with clear timetable for legislation and implementation, including structural benchmarks, milestones and quantitative benchmarks foreseen."
The memorandum was therefore only "partially compliant" with what had been agreed in July, the document stated.
Earlier this week, the German finance ministry said it planned to raise questions about the draft bailout deal at the eurozone finance ministers meeting on Friday.
"We have formulated questions," Wolfgang Schaeuble's finance ministry said in a statement. "These are part of the review process which is not yet completed."
Greece and its creditors -- the EU, European Central Bank and IMF -- are under pressure to finalise the deal by August 20, when Athens must repay some 3.4 billion euros to the ECB.