Greece strikes key deal with creditors

Posted April 08, 2017

"The big blocks have now been sorted out and that should allow us to speed up and go for the final stretch", said Dijsselbloem after the meeting, describing the important progress achieved after all big issues, including labor are settled, but minor issues that would require more talks in Athens, persist.

The bailout program was agreed two years ago and is the third since 2010. The measures in 2020 would focus on tax breaks, such as the ENFIA property tax and income tax, seeking to offset the austerity measures and create the foundation for a social state in Greece, Tsakalotos added.

Greek Finance Minister Euclid Tsakalotos said the commitments would pass through parliament as soon as possible, although the gamble relies on his Syriza party's razor-thin majority.

"We had intensified talks to, first of all, reach an agreement between the institutions and the Greek government on the key elements, the overarching elements, of the policy package", the Eurogroup president was quoted as saying.

The EU's Economy Commissioner Pierre Moscovici has praised Greece's recent strong economic performance, saying the country was exceeding its targets under the program.

"The Greek people deserve the conclusion of the second review", he said. Greece faces some 6 billion euros ($6.37 billion) in debt maturities in July, which means that the creditors still have time to delay the release of the funds and keep the pressure on Greece.

The latest review has dragged on since the middle of past year because of differences over pension and income tax reforms that some lenders believe Greece must undertake to put its finances on a sustainable footing. The IMF strongly insists that easing Greece's debt burden is necessary, while Germany - Greece's biggest creditor - strongly opposes it.

"The whole agreement depends on all the pieces of the jigsaw puzzle", noted Tsakalotos. But the staunchest opponent of that position is Germany, which at the same time says that the bailout programme can only continue with the International Monetary Fund.

"But we are at a point where we think there are good prospects for successfully concluding discussions on these outstanding policy issues during the next mission to Athens", said Gerry Rice, IMF spokesperson.

"I expect that Greece will then in future not need a further rescue programme and from 2018, as planned, will have access to capital markets", Schaeuble said.

A staff level agreement (SLA) could allow Greece take the political endorsement of the euro-zone finance ministers and receive around €7 billion that will secure the country's pending in July.