Greece clinches new EUR 86 bln bailout deal

Greece clinches new EUR 86 bln bailout deal

Athens, August 12, 2015/ Independent Balkan News Agency

By Zacharias Petrou

Following marathon talks in Athens the Greek government and the country’s international creditors finally reached agreement on Tuesday for a new bailout package worth EUR 86 billion.

“The institutions and the Greek authorities achieved an agreement in principle on a technical basis. Now as a next step, a political assessment will be made,” European Commission spokeswoman Annika Breidthardt said.

The rescue — Greece’s third since 2010 – secures the country’s place in the eurozone albeit at a considerable cost as the government reluctantly agreed ti implement more austerity measures in order for the economy to stay afloat.

Greek parliament is expected to vote on the new package on Thursday although the exact procedure has not been determined yet. After that it will have to be passed by national parliaments in several other eurozone countries, including Germany.

During a conference call of senior officials from European Union finance ministries on Tuesday the general sentiment was that the deal was a positive one for all involved. A meeting of Eurogroup Finance Ministers could be called on Friday to approve the bailout.

Athens will have to push through parliament a list of 35 “prior actions” before any funds could be disbursed. A first tranche from the new bailout loan could be around EUR 25 billion. Of that amount, around EUR 12 billion would go toward repaying Greece’s official creditors – including a EUR 3.2 billion payment to the ECB on Aug. 20 – while EUR 10 billion would be set aside for recapitalizing banks.

The positive aspects of the deal were highlighted by a Greek government official who defended the decision to reach an agreement.

Greece is expected to record a primary deficit of 0.25 percent of gross domestic product this year, followed by primary surpluses of 0.5 percent next year, 1.75 percent in 2017 and 3.5 percent in 2018. According to the official this means that there will be no fiscal burden in the forthcoming period.

The agreement foresees not only the refinancing of Greece’s debt until the first six months of 2018 but also enough funding to repay state arrears so fresh money can enter the market and revive businesses, he added.

The agreement signed by Greece and its creditors is “very bad”, the leader of main opposition New Democracy said on Tuesday. “He kept saying he wouldn’t vote because an agreement is tabled as one article and now he’s blackmailing us. He’s the one blackmailing us. It’s not our partners blackmailing him” Meimarakis said.