The institutions briefed the Eurogroup on the second review of the economic adjustment programme, following their review mission to Athens in December.
The Eurogroup urged the Greek authorities and the institutions to swiftly resume negotiations to agree on a policy reform package shared by all stakeholders. Such an agreement is a condition for the successful conclusion of the second review.
The reforms concern Greece's labour and product markets, its energy sector and other areas. An agreement on Greece's medium-term fiscal strategy, i.e. in 2018 and beyond, is also expected.
The European Stability Mechanism (ESM), which is providing the financing for the programme, informed ministers about progress made in implementing the short-term debt relief measures for Greece. These measures were endorsed by the Eurogroup in December and formally adopted by the ESM and EFSF (European Financial Stability Facility) boards of directors on 23 January 2017.
The measures aim to reduce interest rate risk for Greece, including by changing some debt rates from floating to fixed, and to make the burden of debt repayment easier. They do not have any budgetary implications for the ESM shareholders, which are the euro area member states.
Post-programme surveillance in Ireland and Portugal
The Eurogroup was informed about the main outcomes of the sixth post-programme surveillance review in Ireland and the fifth post-programme surveillance review in Portugal, both carried out between the end of November and the beginning of December 2016.
The two post-programme surveillance missions concluded that both Ireland and Portugal are able to repay the loans they received under their respective programmes.
IMF Article IV consultation with the euro area
The International Monetary Fund (IMF) informed the Eurogroup about the main findings of its interim mission in the context of the IMF Article IV consultation, which took place at the end of 2016.
The Eurogroup agreed with the IMF's evaluation of the economic outlook for the euro area and with its views on the policy challenges that the currency union is facing.
The final IMF mission will take place later in the year and will produce the full and final report.
European Semester: 2017 recommendation for the euro area
The Eurogroup discussed the draft Council recommendation on the economic policy of the euro area for 2017.
Ministers agreed that the recommendations for 2017 should focus on growth and job creation, sound fiscal policies and the completion of the banking union.
The draft recommendation will be approved by the Ecofin Council on 27 January.
Draft budgetary plans: Spain and Lithuania
The Eurogroup discussed the updated draft budgetary plans for 2017 of Spain and Lithuania. In October 2016, both countries had submitted draft budgetary plans based on a no-policy-change scenario, because at the time their governments did not have full budgetary powers due to the national electoral processes. Accordingly, they had to submit an updated plan following the appointment of their respective new governments.
The Eurogroup's discussion was based on the European Commission's opinions on these plans, published on 17 January. The Commission considered that Spain's plan was broadly compliant with the provisions of the Stability and Growth Pact, whereas Lithuania's plan was at risk of non-compliance with the SGP.
The Eurogroup broadly agreed with the European Commission's opinions. It took note of the Lithuanian authorities' request for flexible application of the SGP rules, which is permitted under certain conditions. The Eurogroup issued a statement.