Greece prom­ises more re­forms

New Straits Times - - Business -

ATHENS: Promis­ing to cut pen­sions and give tax­pay­ers fewer breaks, Greece has paved the way for the dis­burse­ment of fur­ther res­cue funds from in­ter­na­tional lenders and pos­si­bly opened the door to re­work­ing its debt.

Of­fi­cials from both sides reached a deal yes­ter­day on a pack­age of bailout-man­dated re­forms, end­ing six months of stafflevel hag­gling. Greek Fi­nance Min­is­ter Eu­clid Tsakalo­tos an­nounced it with a term as­so­ci­ated with pa­pal elec­tions.

“There was white smoke,” he said.

Greece now needs to leg­is­late the new mea­sures be­fore eu­ro­zone fi­nance min­is­ters ap­prove the dis­burse­ment of loans, prob­a­bly at the next sched­uled Eurogroup meet­ing on May 22.

Athens needs the funds to re­pay €7.5 bil­lion (RM35.4 bil­lion) in debt ma­tur­ing in July.

The Eurogroup meet­ing, mean­while, may mark the first for­mal dis­cus­sion of debt re­lief for Greece, an is­sue that means dif­fer­ent things to each side.

The In­ter­na­tional Mone­tary Fund reck­ons Greek debt is un­sus­tain­able at 179 per cent of gross do­mes­tic prod­uct and is re­luc­tant to par­tic­i­pate in fur­ther fund­ing with­out a debt re­lief agree­ment.

Euro­pean Union lenders, how­ever, have ruled out for­giv­ing the debt and re­fused to dis­cuss such things as cut­ting re­pay­ment rates un­til af­ter a re­form-for-cash deal is cut. Both groups of lenders have dif­fered markedly about what Greece’s bud­get is ca­pa­ble of sus­tain­ing.

The Greek gov­ern­ment hailed yes­ter­day’s agree­ment as now al­low­ing the re­lief go ahead.

“The gov­ern­ment be­lieves that this road, de­spite the dif­fi­cul­ties, will lead to the coun­try’s exit from bailouts,” In­te­rior Min­is­ter Panos Sk­ourletis told ERT TV. “What’s im­por­tant af­ter clos­ing the bailout re­view is to have a roadmap for debt re­lief.”

Mean­while, Greece agreed with its lenders to sell coal-fired plants and coal mines equal to about 40 per cent of its dom­i­nant power util­ity Pub­lic Power Corp’s ca­pac­ity, said a source.

The agree­ment is part of a re­form deal Greece and its for­eign cred­i­tors reached yes­ter­day, paved the way for the dis­burse­ment of fur­ther res­cue funds un­der the coun­try’s third in­ter­na­tional bailout.

BLOOMBERG PIC

Greece now needs to leg­is­late the new mea­sures be­fore eu­ro­zone fi­nance min­is­ters ap­prove the dis­burse­ment of loans.

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