Athens and its global lenders share the view that banks must complete their recapitalisation by the end of this year and avoid a haircut on large depositors, Greece’s finance minister said on Wednesday.
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The plunge comes as Greece reels from the impression of limits on cash withdrawals and transfers imposed June 29 to keep away from a banking collapse in addition to uncertainty over its negotiations for a brand new bailout and the steadiness of its authorities.
“Everyone is working on Plan A – a deal with disbursement by August 20″, the source said.
Greece is “in the final stretch” of talks with lenders on a multibillion-euro bailout, the country’s prime minister, Alexis Tsipras, has said, on a day when banks suffered more punishing losses on the Athens stock market.
“There is going to be a discussion during the summer and autumn and then the board will make a decision during the autumn”, Sweden’s representative on the 24-member International Monetary Fund board, Thomas Östros, told the Swedish daily Dagens Nyheter, adding “They have an inefficient public sector, corruption is a relatively big problem and the pension system is more expensive than [that of] other countries”.
European Commission head Jean-Claude Juncker said Wednesday that an agreement on the bailout was possible by August 20.
Over the next two weeks Greece must conclude loan terms, or at least secure a bridge loan. Nineteen of the exchange’s 25 blue-chip stocks took a raise, giving FTATRET over 11 percent boost.
Latest inflation figures for July showed the economy remained mired in deflation of -2.2pc, the worst in the 19-country bloc.
The drafting of a new three-year 86-billion euro deal, along with the conditions for it, could be ready by Tuesday.
Since January, an estimated 124,000 refugees and migrants have arrived on Greek shores, representing a 750 percent increase from the same period in 2014, according to UNHCR.
A senior Greek official said the two sides’ assessments of the macroeconomic outlook and primary budget balance targets were very close and unlikely to be an obstacle to a deal.
“The US dollar has continued to strengthen… following more hawkish rhetoric from a Fed official which has resulted in the market discounting a higher probability of a rate hike in September”, said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Tsipras will be relying on pro-European opposition parties to vote for the final bailout deal, which is expected to be put before the Greek parliament shortly before 20 August.
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Earlier on Friday, commission spokeswoman Mina Andreeva said negotiations had begun on drafting a memorandum of understanding on a loan agreement.
