Published: Fri, June 16, 2017
Markets | By Erika Turner

Greece: Debt deal gives clarity to markets

Greece: Debt deal gives clarity to markets

In an interview with ARD television on Thursday, Finance Minister Wolfgang Schaeuble said the IMF had agreed to launch a loan program for Greece - a condition set by the German parliament to support a further bailout - but that the global lender would pay out only later.

Greek Economics Minister Dimitri Papadimitriou has accused German Finance Minister Wolfgang Schaeuble of being "dishonest" by blocking debt relief for Greece despite his acknowledgement that Athens has implemented significant reforms.

"Everyone thinks there is a high probability we will end up with the solution Lagarde outlined", an official involved in preparations for Thursday's meeting in Luxembourg said.

Athens wants a debt relief agreement "that gives clarity to the markets, but of even greater importance, renewed hope to the people of Greece", a government official told Reuters before the meeting. But the issue of some form of debt relief still hangs over the talks, now in their seventh year.

Further measures such as debt relief would only be considered after this current program was finished, he added.

Greek Prime Minister Alexis Tsipras has repeatedly said that debt relief is necessary to get the Greek economy back on track and has indicated that he would be prepared to request a summit of eurozone leaders if no debt relief deal is secured Thursday.

The Eurogroup has welcomed reforms adopted by Greece's parliament - covering areas such as pensions, income tax, the labour market as well as the financial and energy sectors.

Euro zone ministers struck a long delayed bailout deal with Greece on Thursday (June 15) to unlock badly needed rescue cash, but warned Athens would have to wait for debt relief.

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In the communique, the USA added a footnote saying it's taking its own steps to reduce the country's carbon footprint. Constitution in global affairs and domestic issues". "Pulling out of the Paris Accord is also a job killer", Lee said.

Underlining the IMF's willingness to strike a deal after months of wrangling between its European chief Poul Thomsen and the euro zone, Lagarde will attend the ministers' meeting.

Germany, the main contributor to the €300bn in funds the thrice-bailed-out nation has received since its first rescue programme in May 2010, had made IMF participation a condition of additional disbursements. "The € 8.5 billion will cover the big service payment due in July and domestic clearance arrears within the next few months", said Regling, to add that excluding debt service payments, he is confident that Greece will be able to build up cash buffer.

However, Christine Lagarde, the IMF's managing director, said enough progress was made at Thursday's meeting for her to go to the International Monetary Fund executive board in Washington to get the stand-by facility of less than $2 billion. International Monetary Fund officials do not believe European Union assumptions that Greece can run a budget surplus (minus debt servicing) of 3.5% for years to come.

But in Greece expectations appeared gloomier, with state-run media quoting an anonymous government official as saying the two sides were "very far" from an agreement.

"It is a new phase", he said.

The Greek government, whose popularity has fallen sharply as it imposed more austerity measures, faced more criticism Thursday when more than 2,000 older protesters marched through Athens to demonstrate against pension cuts.

"We can't live on 300 euros!" they chanted, with some waving sticks.

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