Eurozone Finance Ministers Unlock First Tranche of Greek Bailout Cash

Talking Points:

• Eurozone finance ministers met to discuss Greece, EU members’ budget plans
• Eurogroup endorsed first set of Greece milestones, unlocked €2 billion in aid
• EU Commissioner Moscovici sees risk of Spain missing 2016 budget targets

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Eurozone finance ministers met in Luxembourg today, with multiple topics set forth on the agenda. The group continued thematic discussion on reforming the services sector in the Euro area along with best budgetary use of gains that have resulted from the currently low interest rates on public debt. Plans to implement Greece’s new European Stability Mechanism program were also covered.

Greece will begin implementing the agreement next week, with progress to be reviewed before December according to EU Commissioner Pierre Moscovici. Eurogroup President Jeroen Dijsselbloem stated that the debt relief can’t be discussed for now until the review is complete. The Eurogroup did endorse the passing of the first set of milestones needed for Greece to receive the first €2 billion disbursement of bailout funding.

The meeting also began preparation for the annual Eurozone budget surveillance procedure. Member states will have to submit draft budgetary plans for yearly review by the European Commission. Spain and Greece have already submitted budget proposals. Commissioner Moscovici sees risk of Spain missing 2016 budget targets while President Dijsselbloem said it is up to Spain to act on EU budget recommendations.

The Greek Finance Ministry expects the Greek economy to contract 2.3 percent and post a primary budget deficit of 0.24 percent of GDP this year. Prime Minister Alexis Tsipras said a review by the Commission is key for Greek bank recapitalization and debt talks. Mr Dijsselbloem said there can’t be recapitalization of Greek banks unless governance is fixed however.