Third time lucky? Greece reaches agreement with creditors on $94 billion bailout

Athens: Greece on Tuesday reached a deal on a multi-billion bailout with its international creditors, officials said, with the government planning to submit it to Parliament later in the day. “An agreement was reached,” a government source told AFP, with Finance Minister Euclid Tsakalotos telling reporters: “We are very close… There are a couple of very small details remaining on prior actions.” A finance ministry source told AFP that the remaining details “do not affect the main body of the agreement.” The Athens stock market opened up 1.64 percent on Tuesday after three straight days of gains. [caption id=“attachment_2387646” align=“alignleft” width=“380”] File photo of Greek Finance Minister Euclid Tsakalotos. AP[/caption] In the final stretch, Tsakalotos and Economy Minister Yiorgos Stathakis spent nearly 22 hours talking to senior representatives from the European Union, the European Central Bank, the International Monetary Fund and the European Stability Mechanism to finalise the list of new reforms required of the Greek government in exchange for a lifeline of up to 86 billion euros ($94 billion). The deadline for Greece to reach an agreement on what will be its third bailout is August 20, when it must repay 3.4 billion euros ($3.7 billion) to the European Central Bank. State broadcaster ERT on Tuesday said Prime Minister Alexis Tsipras had spoken to German Chancellor Angela Merkel, French President Francois Hollande, European Commission chief Jean-Claude Juncker and European Parliament chairman Martin Schultz on the accord. “Today the deal will be submitted to Parliament,” Christos Staikos, a member of the ruling Syriza party, told the station. The chamber is expected to vote on the accord on Thursday, and eurozone finance ministers could be asked to approve it the next day. Late-night talks The marathon negotiations dragged on into the wee hours of Tuesday, with government sources saying at around 4:00 am (0100 GMT) that Athens had agreed on fiscal targets for the next three years. Athens committed to a primary deficit of 0.25 percent of output in 2015, and a surplus in 2016, meaning that no new fiscal measures will be necessary until then, the source said. In 2016 the primary surplus — the balance not including debt service — will be 0.5 percent, followed by 1.75 percent in 2017 and 3.5 percent in 2018, the source added. The Kathimerini daily said the Greek government would have to immediately implement 35 measures before the deal can kick in. These include energy market deregulation, changes to tonnage tax for shipping firms, price cuts in generic drugs, a review of the social welfare system, phasing out early retirement, and implementing market reforms proposed by the Organization for Economic Cooperation and Development (OECD), the daily said. Tsipras meanwhile is under pressure from many in his radical left Syriza party who say the new accord will pile further austerity on a weakened economy and goes against the party’s campaign pledges. But with his popularity among Greeks still high, Tsipras has warned the dissidents of early elections in the autumn if they continue to resist the measures. Former energy minister Panagiotis Lafazanis, who is opposed to the new bailout agreement, has dismissed it as “a negotiating fiasco” and said Tsipras could not “avoid the outcry by resorting guiltily and hurriedly to elections”. However, the government spokeswoman insisted Monday that “there are no electoral thoughts”. “The election talk cultivated in recent days is neither useful nor does it correspond to reality,” spokeswoman Olga Gerovasili said in a statement, adding that the government was focused on concluding a deal and then negotiating debt relief with its creditors. AFP