24th Mar 2018

Greece reaches €2bn deal with creditors

  • A bill to adopt measures included in the agreement will be voted by the pariament Thursday. (Photo: Odysseas Gp)

The Greek government and Greece's creditors reached a middle of the night agreement Tuesday (17 November) that should allow a €2 billion payment in a week's time.

"We have reached agreement on everything, including the 48 prior actions," finance minister Euclid Tsakalotos was quoted as saying by the ANA-AMP news agency.

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The actions include foreclosures and auctions of homes of defaulting owners, a revised mechanism for repayment of debts and VAT measures to offset a ditched VAT on private education institutions.

These were the blocking points in the talks, which stopped a deal at the last Eurogroup meeting last week.

The Greek government refused to lower the level of protection of home owners and wanted to keep a grace period for individuals or companies who missed deadlines to repay their debt to the state.

Eurozone finance ministers had given a week to the Greek government to find an agreement with representatives of the creditors' institutions - the European Commission, the European Central Bank, the European Stability Mechanism (ESM), and the International Monetary Fund.

The measures agreed last night will be put to a vote by the Greek parliament on Thursday.

The disbursement of the €2 billion tranche of the bailout programme is expected to get a green light by the Euro Working Group on Friday.

The decision would then be formally endorsed by the Eurogroup and the payment made by the ESM next Monday (23 November).

The last Eurogroup also linked the agreement on prior actions to the unblocking of a €10-billion fund to recapitalise Greek banks. But a review of banks' needs will have to be completed first.

In the meantime, talks for a second set of the so-called milestones will start, to unblock another bailout tranche of €1 billion.

According to government officials quoted by ANA-AMP, the new set will include measures on non-performing loans (NPL), the loans not repaid to the banks. Some of the NPL would be sold to foreign funds.

In an assessment of the Greek making sector last month, the ECB said that NPL amounted to €107 billion.

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