Greece lumbered toward its next aid payout, possibly broken up into smaller installments and tied to additional economic reforms by Prime Minister Antonis Samaras’s government.
Greece’s “troika” of creditors sealed a staff-level accord on new economic and deficit-reduction steps, leaving open when as much as 8.1 billion euros ($10.4 billion) will be released. Euro-area finance ministers will decide on a portion of that payout in talks that began at 3 p.m. in Brussels today.
“I’m confident that we can take another step forward today,” German Finance Minister Wolfgang Schaeuble said before the meeting. “It will remain a difficult path for Greece.”
European governments led by Germany are continuing to keep Greece on life support, unwilling to let it go bankrupt and exit the euro while doling out aid in the smallest possible doses to avoid upsetting their own taxpayers.
Political tumult in Portugal, among the five euro countries tapping emergency aid, raised the pressure on creditors to keep Greece’s program on track. Germany, the biggest creditor, is seeking to avoid a flareup in the crisis as Chancellor Angela Merkel campaigns for re-election in September.
The euro rose 0.3% to $1.2864 at 3:40 p.m. Brussels time after dropping 1.4% in the previous two sessions. The 17-nation currency may slide if finance ministers don’t approve the next Greek payments tonight, Chris Turner and Tom Levinson of ING Groep NV in London said in client note.
“While important progress continues to be made, policy implementation is behind in some areas,” the troika, comprising the European Commission, International Monetary Fund and European Central Bank, said in a statement.
At issue is whether to transfer Greece’s next payment in one go or, as has been the case since 2012, dribble it out in installments. Creditors may break up the payments again if that is deemed “necessary” and “helpful,” Dutch Finance Minister Jeroen Dijsselbloem, the meeting’s chairman, told reporters.
Austrian Finance Minister Maria Fekter urged a decision tonight to release the aid, saying that “delaying tactics” would be unwise. Dragging out a decision “would yield nothing and make the whole thing more expensive,” she said.