October 5, 2015 / 6:40 PM / 2 years ago

Greek bank recap, debt talks, can start after review of reforms

Eurogroup President Jeroen Dijsselbloem attends a news conference after an eurozone finance ministers meeting (Eurogroup) in Luxembourg, October 5, 2015. REUTERS/Eric Vidal

LUXEMBOURG (Reuters) - Greece must complete the first review of agreed reforms, including the governance of its financial sector, before European creditors can pump in more money to recapitalize Greek banks, the chairman of euro zone finance ministers said.

Jeroen Dijsselbloem said after euro zone ministers’ talks on Greece’s reform progress that he believed Athens was serious about implementing the agreed changes.

“Since we reached an agreement with the (Alexis) Tsipras government, their efforts at implementation have been very, very strong,” Dijsselbloem told a news conference.

“The Greek government understands very well that we cannot move forward in the process of bank recapitalization, we cannot move forward in the process of debt relief, or debt measures, as long as there is no completion of the review.”

The review is a check by Greece’s international creditors - the International Monetary Fund, euro zone governments and the European Central Bank - on how Athens is implementing reforms agreed under the terms of the bailout.

“It is going to be challenging, but there is a strong incentive there for all concerned,” Dijsselbloem said.

Time is short because an additional 15 billion euros for the recapitalization of its banks is available only until Nov. 15 and there are doubts if Greece can complete the reform review with creditors by then.

Officials preparing the meeting of euro zone ministers said last week that Greece could get the 15 billion for banks once it completes the part of agreed reforms that concerns the governance of the financial sector, while discussions on other reforms, such as plans of a pension reform, could take longer.

Dijsselbloem said he did not want to go into such discussions. “I will not speculate what if they have done part of it and not part of the other, let’s work on it and get it done as quickly as possible,” he said.

EU Economic and Monetary Affairs Commissioner Pierre Moscovici said the Commission believed Greece could finish the review before the end of November.

Reporting By Francesco Guarascio and Jan Strupczewski; editing by John Stonestreet

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