Speaking at the Capital Link Forum in New York on Tuesday, a day after European Commission official Declan Costello had issued another reminder that Athens must ensure it completes its pending reforms on time, Finance Minister Euclid Tsakalotos appeared confident that there would not be any delays.
The Greek government wasted no time following the conclusion of the Eurogroup on Tuesday, as it submitted to Parliament draft legislation that will lead to the pension cuts that had been lined up for next year being cancelled.
Greece is not expected to feature prominently at Monday’s Eurogroup but eurozone finance ministers are expected to give the 2019 budget the final green light and urge Athens to quickly shift its attention to the 16 post-programme actions that have to be completed by February.
As part of the European semester package, the European Commission issued on Wednesday the first report for Greece under the enhanced surveillance framework that came into effect following the conclusion of the European Stability Mechanism (ESM) programme last August.
The government is set to submit the final version of the 2019 budget to Parliament on Wednesday without the pension cuts that were pre-legislated in 2017 but with the so-called “positive” measures announced by Prime Minister Alexis Tsipras at the Thessaloniki Expo in September.
Greece and the European institutions appear to be just days away from a compromise over next year’s budget, although the form that their agreement will take is a matter of some dispute.
Monday’s Eurogroup did not provide any definitive answers regarding the negotiations between Greece and the institution over the 2019 budget but the indications are that Athens will be allowed to scrap next year’s pension cuts if it can re-assure the lenders that the 3.5 percent of GDP primary surplus will not be put at risk.
All eyes will be on the dispute of Italy’s budget at Monday’s Eurogroup, but in Greece the government is preparing to start legislating fiscal measures even though the disagreement over its own economic plan for 2019 does not seem to have been settled yet.
The International Monetary Fund has officially indicated that although it believes Greece should implement the pension cuts it has agreed for next year, it will leave it up to Athens and its European lenders to come to an arrangement over the 2019 budget.
It appears that Greece and its European lenders will attempt to settle the pension cuts issue at a special Eurogroup meeting that is due to take place on November 19 with the primary aim of preparing eurozone reform measures for the European Council to discuss in December.