Greece and its worldwide 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 due next week. At the current exchange rate, 1 euro equals $1.10.
Advertisement
The draft agreement forces Tsipras to accept what he had vowed to resist only months ago: the sale of some state property; deep cuts to pensions and military spending; and ending tax credits to people considered vulnerable.
Greece has reached a deal on a multibillion-euro bailout with its global creditors, with the government planning to submit it to parliament later in the day.
“What we don’t have at the moment is a political agreement”.
European Commission President Jean-Claude Juncker was due to hold talks later on Tuesday with German Chancellor Angela Merkel and French President Francois Hollande. Both sides said there were other “minor details” to be ironed out but would not elaborate.
The bailout programme is likely to be met by strong opposition from within Tsipras’s Syriza party, with a sizeable number of dissident PMs claiming the proposed deal is a betrayal of the party’s electoral pledges and is a “noose around the neck” of the debt-stricken country.
But this is a just a “technical” agreement, meaning the plan still needs political approval.
The International Monetary Fund had no immediate comment Tuesday but indicated its position had not changed.
At the end of last year, Germany’s Fraport was named preferred bidder in a deal to operate 14 regional airports in Greece, but the transaction has stalled since the left-wing government of Alexis Tsipras took power in January.
“Finally, we have white smoke”, one official remarked. If not, the European Union can offer Greece a short-term loan to meet the payment.
Still, officials in skeptical northern European countries remained cautious, pending final approval of the deal. Furthermore, officials in Brussels have said that a €5 billion bridging loan to give negotiators more time, and championed by Berlin, was still on the table.
The government says the deal includes lower budget surplus targets than originally envisaged, thereby reducing the overall amount of budget cuts it will need to make. From 2018 onward, Greece is expected to run primary surpluses of 3.5% of GDP to help pay off its debt, which few advanced economies have managed to do for years on end.
After seven months of uncertainty Greece and its creditors are close to reaching a preliminary deal this week on the nation’s €86 billion rescue program, amid growing German isolation over its tough stance towards Athens.
Syriza lawmaker and dissenter Costas Lapavitsas reiterated his opposition and said he would not vote in favour of the new deal in Parliament. The government insists this means there is no longer any danger the banks may have to raid deposits to restore their financial health.
The government also said that banks will not make repossessions and auctions of primary residences will not occur within 2015.
Advertisement
The Greek parliament has already agreed to a raft of cuts, privatisations and austerity reforms to get agreement for the bailout.
