Greece Faces Two-Week Reform Deadline to Unlock $1.1 Billion Eurozone Aid

A list of 13 so-called milestone reform demands signed off by eurozone officials

The Wall Street Journal

By VIKTORIA DENDRINOU

Nov. 27, 2015 4:27 a.m. ET

BRUSSELS—Greece has two weeks to implement 13 pieces of economic reform, including changes to its banking sector and the design of a privatization fund, to receive €1 billion ($1.1 billion) in financial aid, according to an agreement struck by eurozone finance ministries.

Completing these reforms would allow Athens to receive fresh loans from its international creditors, and bring Athens one step closer to starting negotiations on debt relief.

The list of 13 so-called milestones are outlined in a document signed off by senior eurozone finance-ministry officials on Thursday, and seen by The Wall Street Journal.

They mostly include overhauls of the Greek economy that the left-wing government in Athens can easily sign on to, such as setting up an independent tax-revenue agency and improving revenue collection. Greece’s lawmakers last month approved a first bill containing tough austerity measures and economic overhauls agreed under its new bailout program.

However, the list also contains some reforms Athens could struggle with.

Among them are the requirement for legislating and implementing new rules on the management and sale of bad bank loans and the thorny question of the creation of the privatization fund, a requirement the government of Prime Minister Alexis Tsipras agreed to in the as much as €86 billion bailout deal struck with international creditors in August.

Selling state assets remains an unpopular idea in Greece. The sales are supposed to generate €50 billion from the sale assets in coming years. The money would be used for repaying loans from the eurozone to recapitalize Greek banks, for reducing the government’s debt burden, and for investment.

Detail about how the fund will be managed and who will oversee the asset sales remain sketchy.

Thursday’s eurozone agreement also says Athens should “take irreversible steps” to privatize its electricity-transmission company, a move which the government has vehemently opposed up to now. The document leaves some room for maneuver as it says this may not be necessary if “an alternative scheme is provided.”

Greece has to implement these overhauls by Dec. 11, to get the next slice of aid from the eurozone by Dec. 18, the document said.

Still, even if the Greek government makes this deadline, its toughest test lies in the months ahead, when it will be called to implement a far-reaching overhaul to its pension system. Creditors have repeatedly said a reform to the pension system is needed for the conclusion of the first review of Greece’s bailout—a prerequisite for negotiations on debt relief to kick off.

Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com