Greece edges closer to deal to stave off bankruptcy

Greece and its international creditors took a big step Friday toward an agreement that will ensure the country gets the money it needs to avoid a potential bankruptcy this summer but which could spell more pain for austerity-weary Greeks.

For months, the bailout discussions have stalled amid disagreements over pension, tax and l abour market reforms that Greece should take in order to get the rescue money due from its most recent international rescue. Without the money, Greece would once again be facing the prospect of having to exit the eurozone — socalled Grexit.

“The big blocks have now been sorted out and that should allow us to speed up and go for the final stretch,” Jeroen Dijsselbloem told reporters following a meeting of the eurozone’s 19 finance ministers in the Maltese capital of Valletta.

Once a broad agreement is reached in coming weeks, Dijsselbloem said the eurozone will come back to issues related to Greece’s stringent medium-term budget targets and the country’s debts — key conditions of the Greek government.

However, in return for getting agreement on those conditions, the Greek government will have to push through some further tough measures for the years ahead — on top of all those enacted over the past seven years.

Though Greek Finance Minister Euclid Tsakalotos said agreement had been reached on the basic issues that would allow bailout inspectors to return to Athens to iron out remaining issues, he warned of more hardship ahead for austerity- weary Greeks.

“There are things that will not satisfy us, and there are things that satisfy us,” he said. “It is in the nature of every agreement for there to be compromises and things that will upset not generally the negotiating team but the Greek people.”

Tsakalotos said further austerity measures demanded for 2019 — after Greece’s current third bailout ends next year — will be legislated on in the next few weeks, along with Greek-proposed countermeasures to alleviate the pain. However, while the cuts are automatic, the countermeasures will only be implemented if Greece meets its fiscal targets.

The measures will include pension cuts in 2019 worth 1 per cent of Greece’s gross domestic product, and an increase in tax revenues in 2020 worth another 1 per cent through broadening the tax base.

The counter- measures, including programs to alleviate child poverty and help those most in need, will offset those but only if Greece meets its targets.

EU Commission vicepresident Valdis Dombrovskis said a deal on the latest steps to keep Greece afloat should be within reach by the time eurozone ministers meet again on May 22 — easily in time for Greece’s next big debt-repayment hump in July.

Another key development on Friday appears to be the ongoing involvement of the International Monetary Fund, which has been part of Greece’s bailout programs since the first rescue back in 2010.