Greece gets lifeline as lenders agree on bailout

Greece and its international lenders clinched a multi-billion-euro bailout agreement on Tuesday after marathon talks through the night, officials said, raising hopes aid can be disbursed in time for a major debt repayment falling due in days.
After an 23-hour session that began Monday afternoon, exhausted Greek officials emerged in a central Athens hotel to announce the two sides had agreed details of the deal though a couple of minor issues remained to be ironed out, Reuters reports.
“Finally, we have white smoke,” a finance ministry official said. “An agreement has been reached. Some minor details are being discussed right now.”
The pact is expected to be worth up to 86 billion euros ($94.75 billion) in fresh loans for debt-ridden Greece, but 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 euro zone finance ministers on Friday. This would pave the way to aid disbursements by Aug. 20, when a 3.2 billion euro debt payment is due to the European Central Bank.
An agreement would close a painful chapter of aid talks for Greece, which fought against austerity terms demanded by creditors for much of the year before relenting under the threat of being bounced out of the euro zone.

Read also: Eurozone offers Greece €7bn bridge loan

Still, popular misgivings run deep in Germany, the euro zone country that has contributed most to Greece’s two bailouts since 2010, about funneling yet more money to Athens.
During talks which dragged through the night, 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 percent of gross domestic product in 2015, a 0.5 percent surplus from 2016, 1.75 percent in 2017, and 3.5 percent in 2018, the official said.
Dealing with a mountain of non-performing loans (NPLs) in the banking sector were among the sticking points in talks. Athens wanted to set up a “bad bank” to take on the problem loans, while creditors want NPLs bundled and sold to distressed debt funds. It was not immediately clear how that was resolved.

RipplesNigeria… without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now