Eurogroup to decide today on Greece’s request for 6-month extension

The Eurogroup today (starting at 4:00 PM Greece) is expected to decide on Greece΄s request for a six month extension of the Master Financial Assistance Facility Agreement. 

The Greek FinMin formally sent yesterday to Eurogroup’s head Mr. Dijsselbloem the Greek government’s request “for the extension of the Master Financial Assistance Facility Agreement for a period of six months from its termination during which period Greece shall proceed jointly, and making best use of given flexibility in the current arrangement, toward its successful conclusion and review on the basis of the proposals of, on the one hand, the Greek government and, on the other, the institutions.”

The Greek proposal also detailed the 7-fold purpose of the 6-month extension, including among others the agreement of the mutually acceptable financial and administrative terms to stabilise Greece’s fiscal position, ECB’s allowance to re-introduce the waiver in accordance with its procedures and regulations, the extension of the availability of the EFSF bonds held by the HFSF for the duration of the agreement, etc.

Germany΄s FinMin Mr Schaeuble has initially expressed his objections on Greece΄s request as, according to Germany, the request should have included commitments for the successful conclusion of the existing programme and the freezing of the govt΄s pre -election pledges.

In response, Greek government officials said that it is up to Eurogroup to accept or reject the Greek proposal and this decision will make clear who wants to find a solution and who does not. 

The EC spokesman Mr. Schinas told a news briefing that the EC President Mr. Juncker sees this letter as a positive sign, which, in his assessment, could pave the way for a reasonable compromise in the interest of the financial stability in the euro area as a whole. 

Later in the day, the Greek PM had phone calls with Ms. Merkel, Mr. Hollande and Mr. Renzi in an attempt to get support for Greece’s proposal (with the latter two appearing to be more positive to the Greek request), while the EuroWorking Group was trying hard to reach a common ground and a final statement that will please all parties, shed light on ambiguities on critical issues and finally be agreed during today’s Eurogroup.