Paolo Pizzoli, Senior Economist at ING, suggests that the Greece’s benign fiscal data and reported progress in discussions over the remaining stumbling blocks should help to get closer to the finalisation of the first review. 

Key Quotes

“After repeated delays, whereby lenders, given the lack of imminent Greek monetary obligations, seemed in no hurry to get the first review of the third Greek programme done, the picture has changed over the last few days. Negotiations have intensified, signalling that a sense of urgency is now being felt by most of the parties involved. Growing concerns about the impact that the looming Brexit referendum might have on the EU decision-making process might have played a role, in our view. 

The road to the agreement had been made more complicated by the divergent opinions of the IMF and the EU Commission on the current state of the Greek economy and its public finances and their projected developments. 

Whether yesterday’s data will indeed pave the way for an immediate finalisation of the first review, and consequently, for the disbursement of a €5bn tranche of the third programme, is yet to be seen. 

Yesterday’s newsflow coming from the bargaining table was decently comforting: notwithstanding reported progress in discussions, some stumbling blocks remain. 

Negotiations, which were interrupted yesterday to accommodate today’s Eurogroup, will likely resume over the weekend, possibly aiming at a staff level agreement sometime next week, before the Orthodox Easter. Today’s Eurogroup meeting might shed some light on the next developments.”