Greece is entering an “unchartered minefield” in negotiations with its creditors (European Commission, European Central Bank, European Stability Mechanism, International Monetary Fund). The Eurogroup meeting on Monday gave Greece a 7-day deadline until Friday to close all open issues, whereas the representatives of the so-called “quartet” will return to unravel the next round of harsh, crippling measures for November.

By now, Greeks are used to the uncertainty and dire circumstances in the race against time (again) to impose new measures by December so that Greece can get its overdue 2-bln-euro tranche by the end of December. The 10-bln-euro amount put in a segregated account in the ESM that is ready when needed for the recapitalization process for Greek banks is also up in the air.

Few gains, more problems

Greece’s cabinet is meeting on tuesday at Parliament to explore its new steps. The only positive sign from the Eurogroup meeting is that Greek Finance Minister Euclid Tsakalotos did not find himself isolated. His comaraderie with French Finance Minister Michel Sapin appears to have annoyed German Finance Minsiter Wolfgang Schaeuble. Sapin noted at the meeting that it was “strange” that Berlin always wants something “more” from Greece.

Another positive sign was EU partners recognition that a “lot of progress and work has been done” giving Greece a pat on the back, but nothing more.

Now, instead of being alleviated from some of its burden, Greece has seven days in which to:
– complete the first package,
– implement changes in the credit sector (foreclosures, bank administration),
– find a solution to so-called “red” non-performing loans and create special-purpose funds,
– privatize organizations through fast-track procedures, and
– kick off a new package of prior measures.

The “to-do” list needs to be completed over the coming week so that eurozone technocrats known as the Euro Working Group can meet by Monday at the latest and examine whether the pre-conditions for the release of 10+ 2 bln euros have been met by Greece.

Specifically:

1. The 2-bln-euro tranche was not released at Eurogroup as hoped, and neither was the 10-bn-euro fund for Greek banks. There was no easing up on preconditions despite the fact that EU Commissioner Pierre Moscovici reminded that Athens could expect some relief, especially bearing in mind the fact that Greece is burdened by the refugee crisis.

2. Greece’s creditors are threatening Athens with the “gun” that it brought to the table, ie. bank recapitalization. Eurogroup Chief Jeroen Dijsselbloem only allowed for Insurance to be disconnected from recapitalization even though Athens had insisted that all actions cannot be fulfilled simultaneously.

3. Eurogroup, in particular Schaeuble, emphasized “thorny” issues that the Greek government had tried to sweep under the carpet. Namely:
a) the new super-fund for large-scale privatizations,
b) “red” loans and their transfer to other funds,
c) fast-track changes to bank administration,
d) new monitoring of the credit stability fund.

4. Mystery surrounds the changes that the government will accept in a compromise deal for foreclosures. Sources state that the government agreed to lower the protection levels for family incomes of up to 30,000 euros and total property ownership of 180,000 euros at the most.