Greece, int’l lenders clinch multibillion-euro bailout deal

PanARMENIAN.Net - Greece and its international lenders clinched a multibillion-euro bailout agreement on Tuesday, Aug 11, after all-night talks, officials said, raising hopes that aid can be disbursed in time for a major debt repayment due in days, the Guardian reports.

After a 23-hour session which started on Monday afternoon, exhausted Greek officials emerged in a central Athens hotel to announce that both sides had agreed details of the deal, although a couple of minor issues remain.

“Finally, we have white smoke,” a finance ministry official said. “An agreement has been reached. Some minor details are being discussed right now.”

The Greek finance minister, Euclid Tsakalotos, confirmed that “two or three small issues” remain pending.

The pact is expected to be worth up to €86bn in fresh loans for debt-ridden Greece, although there was no immediate confirmation of its size.

Greek officials have said they expect the accord to be ratified by parliament on Wednesday or Thursday and then be vetted by eurozone finance ministers on Friday. This would pave the way to aid disbursements by Aug 20, when a €3.2bn debt payment is due to the European Central Bank.

During talks, the sides agreed on final fiscal targets that should govern the bailout effort, aiming for a primary budget surplus – which excludes interest payments – from 2016, a government official said.

Adapted from an earlier baseline scenario, the targets foresee a primary budget deficit of 0.25% of GDP in 2015, a 0.5% surplus from 2016, 1.75% in 2017, and 3.5% in 2018, the official said, according to the Guardian.

The mountain of non-performing loans in the Greek banking sector were among the sticking points. Athens wanted to set up a “bad bank” to take on the problem loans, while creditors want the loans bundled and sold to distressed debt funds. It was not immediately clear how that was resolved.

Officials had also argued over how to set up a sovereign wealth fund in Greece designed to raise €50bn from privatizations, three-quarters of which would be used to recapitalize banks and to reduce the debt.

Both sides had agreed to deregulate Greece’s natural gas market, finance ministry sources said.