Greece and cred­i­tors 'close' to deal on third bailout

The Pak Banker - - BUSINESS -

Greece and its cred­i­tors were to con­tinue talks Mon­day af­ter marathon dis­cus­sions late into the night, with both sides in­di­cat­ing that the terms of a third bailout were close to be­ing fi­nalised.

The fi­nance and econ­omy min­is­ters, Eu­clid Tsakalo­tos and Gior­gos Stathakis, were back at the ne­go­ti­at­ing ta­ble with the ECB, the In­ter­na­tional Mon­e­tary Fund and the Euro­pean Sta­bil­ity Mech­a­nism at 2:00 pm (1100 GMT) Sun­day and were still talk­ing eight hours later. They are fi­nal­is­ing the draft of a cru­cial new bailout of up to 86 bil­lion eu­ros ($94 bil­lion) in ex­change for fur­ther re­forms be­fore the debt-rid­den coun­try must re­pay 3.4 bil­lion eu­ros to the Euro­pean Cen­tral Bank on Au­gust 20. Talks were go­ing well and could be wrapped up on Tues­day, an EU source told AFP, adding that dis­cus­sions had nar­rowed down the list of pri­or­ity ac­tions that Athens must com­mit to. "We need to have an agree­ment here on Tues­day and all the par­ties are work­ing to­wards it," the source added.

A speedy ac­cord would al­low the bailout to kick in be­fore the Au­gust 20 debt re­pay­ment dead­line. Stathakis said ahead of Satur­day's ne­go­ti­a­tions that the talks were "in the fi­nal stretch". On Sun­day, pro-gov­ern­ment news­pa­per Avgi said: "All signs are point­ing to an agree­ment". It added that par­lia­ment could vote on the ac­cord this week, or that eu­ro­zone fi­nance min­is­ters could ap­prove it first on Fri­day, af­ter which par­lia­ment would vote on it on Au­gust 18. Ger­many's Frank­furter All­ge­meine Zeitung re­ported Sun­day that the Greek gov­ern­ment would likely ap­prove a 27page draft mem­o­ran­dum of re­form com­mit­ments this week­end to al­low the new bailout to go through be­fore Au­gust 20.

An agree­ment will have to be reached by Au­gust 17 to pre­vent Greece from hav­ing to ask for a bridg­ing loan to avoid another loan de­fault. The cash­strapped coun­try al­ready missed two key pay­ments to the IMF that were due on June 30 and July 13, but the re­pay­ments -- amount­ing to around two bil- lion eu­ros -- were later made pos­si­ble with a short-term EU loan. Greek Prime Min­is­ter Alexis Tsipras is also un­der pres­sure from many in his rad­i­cal left Syriza party who say the new ac­cord will pile fur­ther aus­ter­ity on a weak­ened econ­omy and goes against the party's cam­paign pledges. But with his pop­u­lar­ity among Greeks still high, Tsipras has warned the dis­si­dents of early elec­tions in the au­tumn if they con­tinue to re­sist the mea­sures.

For­mer energy min­is­ter Pana­gi­o­tis Lafaza­nis, who has voted against the new bailout agree­ment, has dis­missed it as "a ne­go­ti­at­ing fi­asco" and said Tsipras could not "avoid the out­cry by re­sort­ing guiltily and hur­riedly to elec­tions".

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