EUROZONE-GREECE/EUROGROUP-ARRIVALS Eurozone finance ministers arrive in Brussels to discuss third Greek bailout
Record ID:
143949
EUROZONE-GREECE/EUROGROUP-ARRIVALS Eurozone finance ministers arrive in Brussels to discuss third Greek bailout
- Title: EUROZONE-GREECE/EUROGROUP-ARRIVALS Eurozone finance ministers arrive in Brussels to discuss third Greek bailout
- Date: 14th August 2015
- Summary: BRUSSELS, BELGIUM (AUGUST 14, 2015) (REUTERS) JOURNALISTS
- Embargoed: 29th August 2015 13:00
- Keywords:
- Location: Belgium
- Country: Belgium
- Topics: General
- Reuters ID: LVA5HHZY9BWBPTWEK1C0OB47CGBA
- Aspect Ratio: 16:9
- Story Text: Finance ministers from the eurozone arrived in Brussels on Friday (August 13) expecting to give their final blessing to lending Greece up to 85.5 billion euros after parliament in Athens agreed to stiff conditions overnight.
French Finance Minister Michel Sapin voiced optimism as the meeting began that it would end with an accord that will give Athens the funds needed to meet a loan repayment next week.
However, some issues still need to be ironed out following a deal struck on Tuesday by negotiators from the European Commission, European Central Bank and International Monetary Fund. Among these are how to ensure the IMF remains involved in overseeing the new eurozone programme while delaying satisfying IMF calls for debt relief for Greece until a review in October.
"It's our duty as finance ministers to decide today on the implementation of a third (bailout) programme, which is, I would say the solidarity aspect of the responsibility that the Greek government and the Greek people have shown these past few weeks. That's our job. If clarification is needed, and that could be perfectly legitimate on certain aspects, if description of the processes are needed for them to be able to be put in place as quickly as possible and in the best conditions, we will discuss that. But we are here first and foremost to decide to implement a third programme," Sapin told reporters in Brussels.
After arguing all night, the Greek parliament gave its backing to leftist Prime Minister Alexis Tsipras, though he had to rely on opposition votes after nearly a third of his own supporters rebelled, forcing him to consider a confidence vote that could pave the way for early elections.
The Washington-based IMF, which has its own loan programme for Greece outstanding and has played a role in supervising the implementation by Greece of conditions for two previous bailouts, has urged the other 19 states of the eurozone to give Athens debt relief in order to help revive its crippled economy.
Eurogroup President Jeroen Dijsselbloem said that debt sustainability will be further discussed in the fall, after the initial aid package is agreed upon.
"Debt sustainability is still a major point of concern, certainly for the IMF. The IMF will also look at that, and we will look at it closely, in October, and hopefully we can make sure that it is sustainable by then and give off further guarantees if necessary so that the IMF can come on board in October, because that's very important to us," Dijsselbloem told reporters.
IMF Managing Director Christine Lagarde was due to call in by telephone to the Eurogroup for part of the meeting, eurozone officials said.
Many eurozone governments have ruled out any "haircut" on the nominal amount of debt -- something against current eurozone rules -- and have questioned the IMF assessment of how much relief Greece needs, saying it is too pessimistic.
However, the bloc is keen to have the IMF, whose imprimatur is prized in financial markets, closely involved in managing the Greek programme and has agreed to look at easing terms, such as by lengthening repayment deadlines, once a first review of Greek compliance with conditions is completed in October. The IMF, though, has made clear it sees debt relief as essential for giving the Greek economy the means to service the new loans.
"Restructuring the debt is not ruled out. It's formally planned in the July 12 compromise. So let's work in that direction, let's give ourselves a few weeks to discuss this topic of restructuring debt which we wanted to do after the discussion of the aid package," said Luxembourg Finance Minister Pierre Gramegna.
Slovak Finance Minister Peter Kazimir said restructuring should be looked at as a "reward" and not a "precondition" for the bailout package.
Finnish Finance Minister Alexander Stubb, whose government was among those most ready to favour a Greek exit from the euro before a last-minute deal struck by EU leaders a month ago, said some compromises would need to be reached to get the IMF involved without enacting debt relief.
"I think the way in which it's going to work is that we'll take it in three steps. Step number one is to come to a solution today and agree on a sum which will be released before the August 20. Step number two is to have a first review by the institutions, that will probably take place in October, depending a little bit on the political situation in Greece. And then step number three is to look at how we get the IMF involved and how we can square the circle," Stubb said.
EU officials estimate Greece needs 23 billion euros this month alone to service debts as well as to provide about 10 billion euros to recapitalise Greek banks ravaged by economic turmoil and the imposition of capital controls in June.
How to deal with the banks is another key issue facing the finance ministers, as is the handling of revenues from the privatisation of Greek state assets. - Copyright Holder: REUTERS
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