Moscovici: Eurogroup needs new monitoring scheme to keep tabs on Greece

Financial affairs commissioner calls for ‘enhanced surveillance.’

Eurozone finance ministers “need to invent something new” to ensure Greece sticks to its reform commitments once it exits an €86 billion European rescue program in August, said European Commissioner Pierre Moscovici.

“This is not business as usual. It would be false to pretend that the Greek case is exactly the same as Ireland, Portugal and Cyprus [which were also bailed out in the eurozone’s debt crisis],” Moscovici, who oversees the Commission’s economic and financial affairs portfolio, said in an interview with POLITICO Brussels Playbook.

“We must not go in the opposite direction and create a fourth program in disguise. I don’t want the troika, or the institutions, now to go to Athens in just different suits,” the commissioner said. “But obviously we need to follow up on decisive strategic items with quite detailed commitments. That has a name — enhanced surveillance.”

Details of how that follow-up monitoring will work are among the key issues on Greece still to be resolved at Thursday’s Eurogroup meeting of finance ministers, as they look to sign off on a yearslong, costly rollercoaster ride that took the eurozone close to collapse.

Moscovici was keen not to underplay the significance of the meeting.

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“Everybody is acting as if it was normal,” he said. “It’s not normal. It’s fantastic. Just imagine that we were not able to find a solution Thursday. What would be the message sent for the [European Council on June] 28th?”

“Things are not yet done. It’s not precooked, but we are on the right track,” Moscovici added. “I’m very confident that we have the building blocks for a conclusion. No, I’m actually sure.”

Other issues that ministers still need to hammer out include the size of a final payment for Greece — seen at between €10 billion and €15 billion — and buying back more expensive loans, such as from the International Monetary Fund, to keep financing costs down.

“€15 billion is more convincing than 10, and it’s easier to buy back with more money than with less,” Moscovici said. “But that’s probably one of the figures that will need to be adjusted at the last moment.”

On how long debt maturities should be extended — to keep markets sweet — Moscovici said there is a need for “substantial, but not ridiculous” measures. “Some say 15 years, some say seven, some say 10. Double digits are better than single digits.”

Macron, Merkel reform push

Moscovici welcomed the “Meseberg declaration” on eurozone reform put forward by the leaders of France and Germany Tuesday.

“It was crucial that they showed that they keep the momentum.”

“That final push by the leaders was very positive because the wording seems to be even clearer than what the finance ministers prepared,” the commissioner said, acknowledging there are still unanswered questions on just how big a budget the eurozone could have, whether it’s part of the EU’s Multiannual Financial Framework, and what the money would pay for.

“There is a need for a lot of work to define exactly what it is — but it is a political breakthrough. It is the first time ever that we consider having a budget dedicated to stabilization investment. That also means convergence and that is a political signal which is absolutely decisive,” he said.