In a few hours, Europe will give the green light to the new bailout plan for Greece. In the afternoon in Brussels they will meet once again the finance ministers of the euro area and the first issue on the agenda is precisely the second international aid package in favor of the ailing Greek economy: another 94 billion euros, after the release of the first 35,5 billion arrived on Friday.
The assent of the Eurogroup is now taken for granted, thanks to the satisfactory result of theswap transaction on Greek government bonds which ended last Thursday. The new liquidity will allow the country to repay the 14 billion bonds maturing on March 20, but, as the German Finance Minister said yesterday Wolfgang Schaeuble in an interview with Repubblica, “no one can rule out that Greece needs an additional package".
The other discussions on today's agenda in Brussels will be far more controversial. Firstly the one onincrease in resources for the Eurozone bailout funds (EFSF and ESM). Due to resistance from Germany, this decision has been postponed for months and it is probable that even today the final agreement will not be reached. But time is running out and the dossier will have to be closed by the next G20 meeting in April, when it will be a matter of deciding on the strengthening of the IMF fund in favor of the Eurozone. To date, the most probable solution seems to be to add the unused 250 billion from the EFSF to the 500 billion earmarked for the ESM, which will be operational from July.
Lastly, it is probable that today's Eurogroup will also talk about Spain. Marian's government Rajoy has recently admitted is the country's deficit this year will not be able to fall below 5,8% of GDP, a far cry from the 4,4% expected by the previous Zapatero-led executive. The new target was imposed by the slowdown in growth in the second half of 2011. Rajoy has already asked to be able to postpone the established austerity measures, while keeping the budget targets for 2013 unchanged, but Europe - Berlin in the lead - seems determined not to give the Spaniards any more time.
Tomorrow – while a visit from German Chancellor Angela Merkel is expected in Rome – the meeting of economic ministers will include representatives of all 27 EU countries for the first official discussion on the Tobin tax. We will also talk about the possible suspension of structural funds to Hungary, guilty of having exceeded the budgetary parameters.
