Greek bailout programme dominates Eurogroup meeting in Luxembourg today

Euro-zone finance ministers gather in Luxembourg on Monday for a eurogroup meeting expected to be dominated by Greece as the ministers assess the state of play of the third Greek bailout.

Ministers will discuss the unlocking of €2.8 billion in bailout funding to Athens amid continuing uncertainty about the status of the International Monetary Fund’s involvement in the Greek bailout package.

The Washington-based fund is preparing to take on an “advisory” role in the Greek bailout, rather than as a full participant, Reuters reported on Sunday, amid continuing divisions between the IMF and Greece’s European Union lenders about debt relief for the country.

Euro-zone countries led by Germany, which is facing elections next year, are opposed to granting the level of debt relief sought by the IMF, which has repeatedly argued that Greece’s debt is unsustainable.

The next step forward for the Greek bailout was discussed at the fringes of the IMF and World Bank autumn meetings in Washington last week which senior euro-zone officials attended.

The IMF’s Europe director, Poul Thomsen, said on Friday that the fund was still “fully engaged” with Greece. He added that while the IMF continued to insist on debt relief, this need not come in the form of principal reduction.
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“We have not changed our mind on this. This discussion we will have in the coming months,” he said.

Negotiations have been ongoing between officials representing Greece’s lenders and the Greek government about concluding the second review of the third bailout programme, a development that would unlock up to €2.8 billion in funding for Greece.

The Greek government, led by Syriza leader Alexis Tsipras, has been implementing a series of “milestones” set out by lenders, including announcing the privatisation of utilities and telecoms assets and further pension reform.