UPDATE: Eurogroup 'Not Worried' Less Greek Spending Leverage

--But Worries Over ROL After ELSTAT Trial Hitting Investors

By Tara Oakes

     BRUSSELS (MNI) - Greece's recent bond issuance hasn't left creditors

worried about having less leverage on the country's spending patterns, Eurogroup

President Jeroen Dijsselbloem said Friday.

     Asked by MNI whether worries had struck after the Greek bond issuance means

the country has more access to market cash, Dijssebloem said that the issue

shouldn't be considered in those terms.

     "I'm not worried about leverage. The key issue is that we have a joint

interest and a joint agenda and that the cooperation is strong," Dijsselbloem

responded at a joint press conference with representatives from the ECB, ESM and

European Commission.

     Greece raised E3 billion via a three-year bond sale in July at a yield of

4.625%, the first fully syndicated sale in over 3 years. 

     The next ESM disbursement of E0.8bln could reach Greece by the end of

October, the ESM's Klaus Regling said, adding it is earmarking for arrears

clearance. "We will make that assessment in October," he added.

     Greece raised E3 billion via a three-year bond sale in July at a yield of

4.625%, the first fully syndicated sale in over 3 years. The next ESM

disbursement of E0.8bln could reach Greece by the end of October, the ESM's

Klaus Regling said, adding it is earmarking for arrears clearance. "We will make

that assessment in October," he added.

     Greek Finance Minister Euclid Tsakalotos said he had left the Eurogroup

meeting with "optimism" that the country was going to exit its programme

successfully as planned in 2018.

     His optimism extended to Greece hitting its fiscal targets in 2018, adding

that the country should have a full answer by November for this year to quell

fears.

     "The concern has arisen because of the shortfall in income tax, but at the

same time we have overperformance in other areas. We have overperformance in the

social security budget, we have overperformance in VAT, so what the net result

will be we don't know yet."

     "I'm very confident that we won't need any measures for 2018 because I

think the pros and the cons, the overperformance and the underperformance will

cancel themselves out," he told journalists on the sidelines of the meet.

     He added that neither the ECB nor the ESM were calling for an asset quality

review for Greek banks.

     "There will be a stress test, like there will be throughout Europe, in two

year's time -- when we will have had two years of good growth, when we will have

had all the measures we have taken to address the NPLs and the Greek banks will

be in a very good position," he said.

     ELSTAT WORRIES

     But what is bugging creditors is perceived threats to the rule of law and

independence of Greece's national statistical authority ELSTAT after the most

recent trial of its former chief, Andreas Georgiou.

     Georgiou, who had previously escaped unscathed from other trials, was

handed down a suspended sentence in a trial earlier this year widely believed to

be politically motivated.

     Dijsselbloem insisted that Eurogroup weren't asking the Greek government to

interfere, but said that it had damaged investor confidence.

     "It directly and indirectly touches on whether ELSTAT is independent,

whether the people there are protected and this is raised each time there is a

court case," Dijsselbloem said.

     His conviction in August was for "breach of duty" for not keeping ELSTAT

board members up to date in 2009 when he sent data to Eurostat on the country's

deficit. 

     Tsakalotos confirmed the issue had come up but sought to downplay fears,

saying that Georgiou had only been convicted on a "minor charge of procedure".

     "There is no question of the independence of ELSTAT, the independent

statistical office, or indeed the quality of Greek statistics. And indeed there

was no question in anybody's mind that this Greek government has ever influenced

or attempted to influence the statistical office," he said.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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