Greece says it’s in ‘final stage’ of bailout talks

By , , on August 6, 2015


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ATHENS, Greece – Greece’s prime minister said his country was in the “final stage” of talks for a new bailout, as his left-wing government on Wednesday rejected the idea of extending the negotiations beyond this month.

The government is racing to complete talks with bailout lenders for a new package of loans worth 85 billion euros ($92 billion) ahead of an Aug. 20 deadline, when it has to make a big debt repayment.

It is, however, under mounting pressure from dissenters in the ruling Syriza party to abandon the process.

“We are at the final stage of completing an agreement with the (creditor) institutions,” Greek leader Alexis Tsipras said Wednesday.

His ministers of finance and economy, Euclid Tsakalotos and Giorgos Stathakis, were holding held new meetings with bailout negotiators in Athens.

The negotiators are pressing Greece to speed up a program to cut early retirement rights, impose stricter rules for tax arrears payments, and allow stronger creditor oversight of a privatization fund.

The European Union’s executive Commission, one of the main negotiators, said the talks are progressing in a satisfactory way and believes an agreement can reached by Aug. 20.

“This is an ambitious yet possible timetable if everyone sticks to the commitments,” the Commission spokeswoman, Mina Andreeva, said.

Lead eurozone lender Germany refused to say whether a deal was possible within that timeframe. “A series of points still have to be cleared up,” German Finance Ministry spokesman Marco Semmelmann said.

Nikos Fylis, a parliamentary spokesman for the ruling Syriza party, insisted a proposal by rescue lenders to prolong the talks and give Athens an interim loan was “off the table.”

Greece is hoping to get a big first loan installment, worth 25 billion euros, as soon as the bailout deal is approved. It aims to then start negotiations before the end of the year on how to ease the country’s massive debt burden.

Eurozone lenders strongly oppose writing off a portion of Greek bailout debt but are willing to discuss better repayment terms.

With Greece widely expected to slide back into recession this year, debt repayment is becoming increasingly difficult.

The National Institute of Economic and Social Research, a respected London-based think-tank said Wednesday that Greece would need to write off at least 95 billion euros, or 55 percent of its gross domestic product, to make the national debt sustainable.

Apart from payment deadlines, Greece is trying to find a way to ease the pain on banks and markets from the limits on money withdrawals and transfers that the government imposed in late June to avoid a banking collapse.

Shares on the Athens Stock Exchange fell for a third straight day since opening Monday after a five-week closure. The main index was 3.3 percent lower in afternoon trading.

Tsipras is meanwhile facing a growing challenge from within his Syriza party, where dissenters have vowed to oppose a third bailout.

The revolt could trigger an early general election in the fall, less than a year into Tsipras’ mandate.

In Athens, a Communist-backed labor union held a peaceful protest against the government’s new budget austerity measures. Farming associations in northern Greece are planning protests next week.