Stop me if you’ve heard this one before, a Prime Minister comes in to Greece and promises a debt deal before his ashes hit the floor. World press reports say it’s happening again.
Greece Inches Closer to Third Bailout, But Finns Resist
The Telegraph/Szu Ping Chan
Greece is closer to unlocking a fresh €86bn (£61bn) rescue package after the country’s creditors reportedly agreed on a draft deal this weekend.
German and Greek media said 27-pages of “substantial” and “far-reaching” reforms had been agreed following marathon talks between Euclid Tsakalotos, Greece’s finance minister, and the country’s creditors on Saturday.
The six hour meeting, which ended in the early hours of Sunday morning, will see the country slash defence spending and subsidies for farmers as part of a fresh package of austerity measures, according to German newspaper Frankfurter Allgemeine Sonntagszeitung.
Mr Tsakalotos and Giorgos Stathakis, Greece’s economy minister, will meet creditor representives again on Sunday to iron out details on fiscal targets and a €50bn privatisation fund.
The country’s third bail-out in five years has faced fierce opposition from countries such as Finland, which threatened on Saturday to withhold its support for a new deal.
Timo Soini, the country’s eurosceptic foreign minister, said Finland was “running out of patience” with Greece, as he insisted that a Greek exit from the eurozone was still the most likely outcome.. “Of course we can stay out [of another rescue package], that is possible,” he told Reuters.
In a separate interview with Bloomberg, Mr Soini said: “Truth is the strongest force … We should admit that this isn’t going to work.”
Mr Soini admitted that Finnish opposition would not derail a a third bail-out, citing an emergency voting procedure whereby financial assistance can be granted if supported by a qualified majority of 85pc of the votes cast. Finland has a share of less than 2pc of the vote.
“If we vote against a deal, it goes to the emergency procedure, and a package is implemented regardless of us,” said Mr Soini. “I don’t believe that this [bail out] policy will provide solutions, and I think that, in the longer term, ‘Grexit’ is the most likely scenario,” he said.
Greece, Creditors Close to Finalizing Bailout Deal
On Saturday creditors were said to have agreed amongst themselves a 27-page draft document, known as a “memorandum of understanding,” on the bailout. The finished product was expected to be given to Athens soon.
Officials from the EU and International Monetary Fund (IMF) met the Greek finance and economy ministers in Athens on Saturday. Initial talks were said to be concerned with the first steps necessary for Greece to receive money to meet its debts.
“The discussion today has to do with the prior actions for the first disbursement,” a Greek government official said, adding that the focus of the talks on Sunday would address “the more controversial issues in the bailout agreement.”
“We hope that everything will go well,” Greek Economy Minister Giorgos Stathakis told journalists in Athens outside the hotel where talks were taking place. Asked whether an agreement was within reach, Stathakis said that “could be” correct.
The memorandum of understanding spells out the economic reforms Greece would need to implement in exchange for the rescue aid.
For two weeks, Greece has been negotiating the new bailout – its third in five years – with the European Commission, the European Central Bank (ECB) and the IMF.
Pressure Builds on Greece to Reach Deal
Wall Street Journal/Viktoria Dendrinou and Stelios Bouras
Greece and its creditors faced mounting pressure Friday to strike a deal on painful economic overhauls the country must undertake in exchange for a new bailout ahead of a looming debt repayment later this month.
Technical experts from Greece and the institutions overseeing the country’s bailout—representing the European Central Bank, the International Monetary Fund, the European Commission and the eurozone bailout fund—have been meeting in Athens over the past two weeks in an effort to flesh out the reforms needed to secure rescue aid worth up to €86 billion ($94 billion).
But significant differences remain, and the clock is ticking. Greece needs the money to repay some €3.2 billion in maturing debt to the ECB on Aug. 20.
“We are running as fast as we can in order for there to be a deal. Considerable progress has been made but there are some outstanding issues,” said a Greek government official with knowledge of the negotiations.
Senior officials from European Union finance ministries will hold a call later Friday to discuss progress on talks and examine whether a deal could be reached before the ECB deadline, or whether Greece might need some form of bridge financing to meet its debt obligations.
Greek and European officials have signaled optimism over the past few days, with the Europeans pointing to a smoother process than the strained manner of the talks that led to a tentative deal on July 12.
“We now have a relatively normal process of negotiations. It is clearly an improvement,” said a European official.
Late Thursday, Greek Prime Minister Alexis Tsipras met with French President François Hollande on the sidelines of the inauguration of the expanded Suez Canal in Egypt. They agreed that talks can be “completed straight after August 15,” the Greek prime minister’s office said.
So far, the two sides have yet to agree on Greece’s new fiscal targets and how the country will manage the sale of state-owned assets, according to two Greek officials.