Greece bailout deal by mid-August

AFP, BRUSSELS: Greece and its creditors aim to finalise a deal for the country's third bailout by mid-August in time for Athens to make a huge payment to the ECB, EU Economic Affairs Commissioner Pierre Moscovici said yesterday.
“Talks on a new programme for Greece have just started and will lead us to the second fortnight of August,” Moscovici said at a news briefing in Brussels, later specifying the beginning of that period.
“That is the general calendar but we will see how things go,” he said, adding that the “main thing” is to conclude the official Memorandum of Understanding -- the document will bind Greece with its creditors.
Greece and its EU-IMF creditors are currently trying to hammer out the details of a bailout worth up to 86 billion euros ($93 billion) that was agreed in principle by the eurozone's 19 leaders at a summit last week. Both sides are under huge pressure to finalise the terms of the three-year rescue before August 20 when Greece owes the European Central Bank a loan repayment of 3.2 billion euros ($3.5 billion) it cannot afford.
The leftist government in Athens on Tuesday also set August 20 as the deadline to finalise the negotiations.
The talks will detail the timeline for disbursements by the creditors over the next three years, in return for enacted reforms by Greece, which must also meet ambitious budget targets.
Meanwhile, Greece's embattled Prime Minister Alexis Tsipras was to seek to push through Greek parliament a second set of reforms in return for the bailout, despite a rebellion by a fifth of the MPs from his radical-left Syriza party in voting on the first batch of reforms.
"I am confident that Greek Parliament will adopt tonight the two laws agreed at the Euro summit," Moscovici said.
The embattled premier last week faced a revolt by a fifth of the lawmakers in his radical-left Syriza party over changes to taxes, pensions and labour rules demanded by EU-IMF creditors. Tsipras had to rely on opposition MPs to approve the law, a key condition for opening talks on a three-year bailout worth up to 86 billion euros ($93 billion). The second bill is less controversial.
MPs were to vote on measures including an EU directive that guarantees bank deposits up to 100,000 euros ($108,000) and civil justice reforms designed to speed up legal proceedings and reduce their cost.
Analysts say the debate will show whether Tsipras can avoid another deep split within Syriza and head off the risk of early elections after only six months in power.
The prime minister received a boost Tuesday when Standard & Poor’s raised its credit rating on Greece by two notches to CCC+ from CCC, still in junk territory but a step in the right direction. S&P said the scenario of Athens defaulting on its debts was no longer inevitable in the coming year.
As a result, the risk of Greece pulling out of the euro was reduced but still “high,” it said.
A “Grexit” may still be on the table as even with a bailout the Greek economy “looks set to remain in a deep and prolonged recession,” said Jonathan Loynes, chief European economist at research firm Capital Economics.
“Overall, we expect the Greek economy to contract by about 3 percent this year and possibly much more, with little improvement in 2016,” he said. “Against that background, the new bailout is likely to unravel quickly and a Greek exit from the currency union remains more likely than not.”

Greece bailout deal by mid-August

AFP, BRUSSELS: Greece and its creditors aim to finalise a deal for the countrys third bailout by mid-August in time for Athens to make a huge payment to the ECB, EU Economic Affairs Commissioner Pierre Moscovici said yesterday. Talks on a new programme for Greece have just started and will lead us to the second fortnight of August, Moscovici said at a news briefing in Brussels, later specifying the beginning of that period. That is the general calendar but we will see how things go, he said, adding that the main thing is to conclude the official Memorandum of Understanding -- the document will bind Greece with its creditors. Greece and its EU-IMF creditors are currently trying to hammer out the details of a bailout worth up to 86 billion euros ($93 billion) that was agreed in principle by the eurozones 19 leaders at a summit last week. Both sides are under huge pressure to finalise the terms of the three-year rescue before August 20 when Greece owes the European Central Bank a loan repayment of 3.2 billion euros ($3.5 billion) it cannot afford. The leftist government in Athens on Tuesday also set August 20 as the deadline to finalise the negotiations. The talks will detail the timeline for disbursements by the creditors over the next three years, in return for enacted reforms by Greece, which must also meet ambitious budget targets. Meanwhile, Greeces embattled Prime Minister Alexis Tsipras was to seek to push through Greek parliament a second set of reforms in return for the bailout, despite a rebellion by a fifth of the MPs from his radical-left Syriza party in voting on the first batch of reforms. I am confident that Greek Parliament will adopt tonight the two laws agreed at the Euro summit, Moscovici said. The embattled premier last week faced a revolt by a fifth of the lawmakers in his radical-left Syriza party over changes to taxes, pensions and labour rules demanded by EU-IMF creditors. Tsipras had to rely on opposition MPs to approve the law, a key condition for opening talks on a three-year bailout worth up to 86 billion euros ($93 billion). The second bill is less controversial. MPs were to vote on measures including an EU directive that guarantees bank deposits up to 100,000 euros ($108,000) and civil justice reforms designed to speed up legal proceedings and reduce their cost. Analysts say the debate will show whether Tsipras can avoid another deep split within Syriza and head off the risk of early elections after only six months in power. The prime minister received a boost Tuesday when Standard Poors raised its credit rating on Greece by two notches to CCC+ from CCC, still in junk territory but a step in the right direction. SP said the scenario of Athens defaulting on its debts was no longer inevitable in the coming year. As a result, the risk of Greece pulling out of the euro was reduced but still high, it said. A Grexit may still be on the table as even with a bailout the Greek economy looks set to remain in a deep and prolonged recession, said Jonathan Loynes, chief European economist at research firm Capital Economics. Overall, we expect the Greek economy to contract by about 3 percent this year and possibly much more, with little improvement in 2016, he said. Against that background, the new bailout is likely to unravel quickly and a Greek exit from the currency union remains more likely than not.