Wednesday

26th Sep 2018

Merkel 'skeptical' about Greek bailout deal

  • Merkel (l) told Greek PM Alexis Tsipras (c) that she would prefer a bridge financing to a full bailout. (Photo: The Council of the European Union)

The agreement on a third bailout reached Tuesday (11 August) by negotiators form the Greek government and its creditors now needs to be endorsed by the Greek parliament and the eurozone countries.

But the most crucial player, Germany, has not yet dispelled doubt about its readiness to rubber-stamp a deal that leaves some issues unsettled.

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"We will carefully examine the result from Athens in the coming days," German deputy finance minister Jens Spahn said Tuesday.

In a conference call held on Tuesday, eurozone deputy finance ministers gave a positive view on the agreement and said they would continue talks to prepare a Eurogroup discussion, probably on Friday.

Phone call

In a phone call on Tuesday evening, however, German chancellor Angela Merkel told the Greek prime minister Alexis Tsipras that she was "skeptical" about the deal, according to a Greek official quoted by Greece's Kathimerini.

Merkel reportedly said she favoured bridge financing to cover Greece's short term needs, rather than a full 3-year agreement that needs more talks on details.

Greece needs fresh money before 20 August when it must repay a €3.2 billion loan to the European Central Bank (ECB). 

Four installments for a total of €1.5 billion are also due to the International Monetary Fund (IMF) in September.

Finland's finance minister Alexander Stubb, one of Germany's closest allies in the Eurogroup opined on Tuesday that "agreement [was] a big word".

"We must take one step at a time," he said, adding that "there remains work to be done with details."

Prior actions

Greek finance minister Euclid Tsakalotos admitted on Tuesday morning that "a couple of details" needed to be worked on, especially on prior actions.



Germany's attitude could be influenced by the Greek parliament vote on these prior actions before the Eurogroup discussion. And Merkel's skepticism might also be a tactic to obtain that a maximum of measures are included in the bill.

No details have been given on the set of prior actions but they should include the phasing out of early retirements, implementation of privatizations and the liberalization of the energy sector.

According to Bloomberg news agency, Merkel has been pushing for the privatization of water in Greek cities.

Parliament

In Athens, Tsipras asked for the Parliament to be recalled from its summer recess for a vote on Thursday, but Parliament speaker Zoe Konstantopoulou said the planning would not be decided before Wednesday evening.

Konstantopoulou is a member of the left wing of Tsipras' Syriza party and her reluctance to summon MPs reflects Syriza internal opposition to the deal.

Deal reached on new Greek bailout

The Greek government says it has agreed terms with creditors on a third aid programme. But questions remain over the amount of the bailout and IMF participation.

Greek deal puts Tsipras in straitjacket

The 29-page document agreed with Greece's creditors outlines wide-ranging reforms of the Greek economy and administration with tight deadlines and fiscal targets.

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