Greece, creditors seen to be closing in on 3rd agreement over bailout
Greece and its creditors resumed talks in Athens on Sunday with both sides indicating that the terms of a third bailout will be finalized in short order.
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 3:00 p.m. (1200 GMT).
They are finalizing the draft of a crucial new bailout of up to 86 billion euros (US$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.
Stathakis said ahead of negotiations on Saturday that lasted more than six hours that the talks were “in the final stretch.”
On Sunday, pro- government newspaper Avgi said: “All signs are pointing to an agreement ... possibly being reached even today.”
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 Aug. 18.
Germany’s Frankfurter Allgemeine Zeitung reported Sunday that the Greek government would likely approve a 27-page draft memorandum of reform commitments this weekend to allow the new bailout to go through before the Aug. 20 repayment deadline.
With its lenders insisting on “very good cooperation” from Athens, both sides are “working flat out” and “intense talks with Greece will continue over the weekend,” an EU source said.
An agreement will have to be reached by Aug. 17 to prevent Greece from having to ask for a bridging loan to avoid another loan default.
The cash-strapped 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 billion euros — were later made possible with a short-term EU loan.
Greek Prime Minister Alexis Tsipras is under pressure not only by the payment deadline but also 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.