6th Aid Tranche Release Not Far
It seems strange but is true, the sixth aid tranche to Greece is not as doubtful as presented. At a meeting of the College of EU Commissioners, attended by Jose Manuel Barroso, the main agenda item was the situation of Greece and the prospects of releasing of the next aid instalment. Both briefing and bottom end of the meeting reach to the following:
*The situation in Greece has deteriorated. Despite measures, it is considered unlikely for the country to meet its targets.
* The euro area is not in position to control the consequences of such a situation, thus it is estimated that the next instalment would be disbursed to avoid –at least for now- a disorderly default.
*Planning for broader supervision in implementing the commitments of the memorandum of understanding and the medium-term fiscal program should be carried out. The EU Task Force that arrived earlier this week in Athens would play a critical role.
Besides the conference call between Greek PM and French-German leaders, a debate in the European Parliament is scheduled about the overall course of European economy and the situation in Greece, attended by Commissioner Olli Rehn and ECB President Jean-Claude Trichet.
The Greek issue has acquired a new dimension in the last days due to the trouble in the European banking system, focusing on Italian and Spanish bonds.
Thus, the debate of a possible credit event in Greece has been involved with possible consequences of the emerging banking crisis and the debate about the fate of the Italian debt.
Brussels sources told Capital.gr that it seems that the crisis in Italy and France facilitates Athens and requires the Eurozone to address the issue of next aid tranche based on easier criteria.
But this forces France and Germany to accelerate decision making beyond the issue of the next instalment, which would not be easy for Greece.