Once again, the Syriza government cites “political reasons” for delaying reforms.

By ZEKE TURNER

The Greek government’s reluctance to enforce politically sensitive economic reforms, such as repealing a law protecting homes from foreclosure, risks delaying payment of the next €2 billion available under its third bailout program.

A Eurogroup meeting of finance ministers in Brussels on Monday afternoon intended to launch the approval process for the next pay-out, but ministers have been forced to push back the schedule for the loans, part of a package worth up to €86 billion.

“We are working day and night — I stress, really day and night — to work on those points that are still open,” economics commissioner Pierre Moscovici told reporters after the meeting on Monday night.

Eurogroup President Jeroen Dijsellbloem, who chaired the meeting of eurozone finance ministers, said the group had asked the Euro Working Group — a meeting of deputy finance ministers — to meet at the beginning of next week at the latest to review Greece’s progress and hopefully start releasing the next tranche of the loans.

In the last weeks, as Greece has come under pressure to deliver on some 50 reform targets or milestones related to the €2 billion payout, the Syriza-led government has insisted it can only push through economic reforms if political stability is maintained — arguing that the government’s ability to steer the country is at risk if Greek citizens have to endure further painful reforms.

At present, two laws protect homeowners from the risk of disclosure of their primary residence, but the terms of the bailout agreed by leftist Prime Minister Alexis Tsipras in August explicitly targeted these laws for repeal.

Other open issues hampering the payout are minimum prices for generic drugs, a VAT exemption on private school tuition and the government’s “100 installments” payment plan for over-indebted individuals.

“The ministers on the Greek side on all the phone calls are insisting that, for political reasons, they cannot have certain foreclosures,” said an EU official.

That argument holds little water in Brussels, which is insisting that Athens has agreed to the terms of the bailout.

“It is on Greece to implement what we agreed in July and August,” German Finance Minister Wolfgang Schäuble said before the meeting on Monday.

Meanwhile, the International Monetary Fund, which is waiting for Greece and its European creditors to reach a deal on soaring debt levels, has pushed for exemptions to home foreclosures to be temporary, according to an official close to the meeting.

Although Greece faces no major upcoming debt repayments to its creditors at the IMF or from its first two bailout packages, the pressure is on to keep the bailout funds flowing.

“We need to find a solution very urgently,” an EU official said.

The time pressure stems from an upcoming recapitalization of Greece’s banking system, which must be completed before stricter EU rules take effect at the beginning of next year. Before the recapitalization process can begin, Greece needs to fix its weak insolvency and foreclosure rules.

“If you want to secure your banking sector you must be able to recooperate money from private debt,” Moscovici said.

On Greece’s side remains one piece of leverage in its dealings with its EU creditors: the migration crisis. Athens argues that the large numbers of migrants arriving on Greek islands means an annual cost of €480 million, of which more than €331 million is not covered by financial support from the EU.

But Greece’s economy desperately needs to rally any positive economic news it can.

This week the OECD, the Paris-based rich country grouping, followed the European Commission in revising down its economic outlook for Greece. Experts now expect the Greek economy to contract 1.4 percent in 2015 and 1.2 percent in 2016, after estimating in the summer growth of 0.1 percent and 2.3 percent for this year and next.

“Rebuilding confidence, recapitalising the banks and lifting capital controls will be key to kick-start credit and investment again,” Christian Daude, the head of the Greece unit in the OECD’s economics department, told POLITICO. “In this sense, meeting the targets with creditors is important to solve these issues.”