Athens strikes agreement with creditors on “many issues”

Athens strikes agreement with creditors on “many issues”

Athens, November 16, 2015/ Independent Balkan News Agency

By Zacharias Petrou

Greece and its eurozone creditors have reached an agreement on many issues in the reform program that Athens is implementing in return for its international bailout, the head of the Eurogroup, Jeroen Dijsselbloem, said in a statement on Sunday.

“I welcome that good progress has been made between the Greek authorities and the institutions in the discussions on the measures included in the first set of milestones and on the financial sector measures that are essential for a successful recapitalization process,” Dijsselbloem said.

“Agreement has been reached on many issues” he said, adding that the Euro Working Group (EWG) would meet on Tuesday to take stock of the situation and decide if a disbursement is possible.

Talks between the Greek government and the “quadriga” of creditors in Athens continued over the weekend. Finance Minister Euclid Tsakalotos and Economy Minister Giorgos Stathakis were locked in talks with the heads of the “quadriga” delegation.

Tsakalotos and Stathakis visited Prime Minister Alexis Tsipras at his office late on Sunday night to inform him of progress made so far and determine the government’s next move.

The Greek made one last attempt to close all the issues left open before the markets open on Monday. However, according to the latest information, it is unlikely that the talks will be wrapped up before the Euro Working Group meeting which was moved to Tuesday in order to allow more time for negotiations.

Reports also suggest Athens may seek a last-minute political solution with Alexis Tsipras or Euclid Tsakalotos considering calling their counterparts in Europe in search of a deal.

A top Greek official taking part in the negotiations told the press that convergence is noted on many issues such as offseting measures for VAT on private education and the repayment of debts in 100 installments. However, differences remain over how to deal with foreclosures and non-performing loans.

Specifically, a serious sticking point is who will take over the non-performing loans (NPLs) of businesses (i.e. funds) and under which terms administrators will go into companies that are in debt. The government reportedly wants to avoid the involvement of vulture funds in the administration of Greek businesses. However, with the bank recap in full swing it is under pressure to reach a compromise with the troika sooner rather than later on this issue.

On Saturday talks focused mainly on non-performing loans and how to protect indebted primary home owners from foreclosures. A Greek proposal for 58-60% of primary home owners to be protected is on the table. The main criterion for their protection is for their income not to exceed 30.000 euro annually. Also, the speeding up of the judicial process for foreclosures was discussed.

Reports suggest that the two sides have made progress towards agreement on the measures to offset VAT in private education, reforming banking governance and a new process for the repayment of debt in 100 installments.

The marathon talks between the two sides have been going on while the terrorist attacks in Paris unfolded in the background, a development which has impacted on the negotiations. There is fear as to how the markets will open on Monday and how further delay in reaching an agreement will impact on the recapitalization process of the banking system with the terrorist crisis in the background.

The troika inspectors will extend their stay in Athens – for a week – in order to begin talks on the next set of prior actions required (social security reform, taxation of farmers, etc.) for the disbursement of a 1 billion euro sub-tranche. Also, the budget is set to be discussed before it is tabled in parliament by November 21.