Hopes for deal this week

Sev­eral is­sues yet to be agreed but meet­ing Au­gust 20 dead­line may be fea­si­ble

Kathimerini English - - Front Page -

Greece will aim to fi­nal­ize an agree­ment with lenders this week in the hope of be­ing in a po­si­tion to pass the deal through Par­lia­ment by Thurs­day.

There are a num­ber of is­sues that need to be ironed out in the next cou­ple of days if the gov­ern­ment is to be able to keep to a timetable that would al­low the Euro­pean Sta­bil­ity Mech­a­nism to dis­burse money be­fore Greece has to re­pay 3.2 bil­lion eu­ros to the Euro­pean Cen­tral Bank on Au­gust 20.

Some of the is­sues on which there is yet to be agree­ment in­clude changes to farm­ers’ tax­a­tion, scrap­ping nui­sance taxes, fur­ther prod­uct mar­ket lib­er­al­iza­tion, dereg­u­lat­ing some pro­fes­sions and al­low­ing Sun­day trad­ing.

The other is­sues that must be set­tled are which prior ac­tions have to be ap­proved now and how much fresh fund­ing Greece will re­ceive on ap­proval of the third bailout.

If the new agree­ment is ap­proved by the Greek Par­lia­ment on Thurs­day, eu­ro­zone fi­nance min­is­ters are likely to con­vene the next day to give their green light as well. This will mark the start of par­lia­men­tary ac­tiv­ity in other eu­ro­zone coun­tries, start­ing with Fin­land on Au­gust 14. This part of the ap­proval process is ex­pected to last un­til Au­gust 18, al­low­ing the ESM time to dis­burse money to Greece.

Athens is hop­ing to re­ceive a to­tal of 25 bil­lion eu­ros later this month. Of that, 12.5 bil­lion will be used to pay off debt, 10 bil­lion eu­ros will go to­ward bank re­cap­i­tal­iza­tion and another 2.5 bil­lion will be used to re­duce state ar­rears, which reached 5.3 bil­lion at the end of June.

If the dead­lines are not met, though, Greece is likely to re­ceive a bridge loan, as it did last month. The new loan is likely to be worth 5 to 6 bil­lion eu­ros and will cover the pay­ment to the ECB, as well as obli­ga­tions to the In­ter­na­tional Mon­e­tary Fund in Septem­ber.

Mem­bers of the EU’s Eco­nomic and Fi­nan­cial Com­mit­tee took part in a con­fer­ence call late on Fri­day to dis­cuss the state of ne­go­ti­a­tions. Sources fa­mil­iar with the con­tent of the call told Reuters that Athens is on track to reach an agree­ment with the in­sti­tu­tions soon, pos­si­ble in time for Au­gust 20.

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