Six Prerequisites Pending Before Greece Gets €7.7 Bln Loan Tranche

Tuesday, July 4th, 2017
Last Update: 14:13

Greece needs to legislate six prerequisites that remain pending before the next loan tranche of 7.7 billion euros is disbursed, a report says.

The Greek government has six days to close the issues pending before the July 10 meeting of euro zone finance ministers. Nonconformity would block the disbursement of the funds.

The most important issue is the suspension of the prosecution against the three members of the Hellenic Republic Asset Development Fund (TAIPED) advisory council who were appointed by the European Commission.

The second is the operation of retail stores on Sundays in tourist areas and throughout the tourist season, which has been extended to five months.

The third stipulation is that 800 million euros out of the total 7.7 million of the tranche to go to the repayment of overdue public debts to individuals. Under the revised Memorandum of Understanding, Greek authorities will have to give much more analysis to the “stock” of overdue debts in excess of 6.5 billion. Lenders want to have a breakdown of the debts and the sectors the debts are owed to. Also, they want to know the cause of the repayment delay.

Another issue pending is the legal opinion whether the pension cuts voted for 2019 are in line with the Greek Constitution.

The fifth prerequisite is the opening of the engineer profession, which has been two months overdue.

Finally, the operation of electronic auctions remains to be legislated. Creditors want to see the new electronic platform up and running.

This time the disbursement of the loan tranche by the European Stability Mechanism (ESM) should be approved at a ministerial level rather than technocrats. This means that the Greek Finance Minister should explain their completion to both the Eurogroup and the ESM Board.

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