Eurogroup gathers to discuss Greece on Tuesday – Unicredit

Research Team at Unicredit, suggests that on Tuesday, EU Finance Ministers will gather to assess whether Greece has completed the prior actions attached to the first review and thereby qualifies for the disbursement of the next aid tranche.

Key Quotes

“We expect the assessment to be positive, although the lingering uncertainty about the role of the IMF in the program casts doubts on whether the green light on the disbursement will come as soon as next week.

The discussion is also likely to focus on debt-relief measures, which are a sticking point for the IMF’s participation in the program. While Europe’s international creditors would prefer a sequenced approach, in which a package of measures could be phased in progressively to preserve debt sustainability while avoiding the fuelling of moral hazard, the IMF is calling for debt relief to be delivered upfront to ensure Greece’s financing needs remain on a sustainable path.

Ultimately, a compromise seems likely, although timing and details remain highly uncertain.”