European finance ministers' meeting on Feb 20: Greece back as a major concern - BBH

Further to the weekend news, there is a European finance ministers' meeting on Feb 20.  

Key Quotes:

"It was hoped an agreement would be reached by that meeting.  Such an agreement would be new Greek austerity measures for payment from the 86 bln euro 2015 package to ensure that government can make the seven bln euro payment due in July. If the agreement is elusive, which seems highly probable, then the situation looks frozen for at least three months.  The Dutch parliamentary approval is necessary, and it will be dissolved ahead of the March election.  The French election in April (and a likely second round in May) will also likely deter an agreement.   

The underlying issue is the sustainability of Greece's debt.  In an unusual development, the IMF executive board was split on the issue earlier this week.  The European contingent argued that Greece's debt is sustainable and that the European commitment to Greece is what makes it a unique case.  Other board members, including the US, China, Brazil, India and South Africa questioned the sustainability of Greece's debt and did not accept that a 3.5% primary budget surplus for years was realistic.   

The IMF's position is important even though when the crisis first broke the ECB and Germany were not particularly keen for the involvement of the multilateral lender.  Now Germany (and the Netherlands) insist on the IMF's participation as a condition for their continued support.  At the same time, the IMF's assessment has increasing diverged from Germany's and the European Commission's (self-serving) assessment more broadly."