Greece to get 'more clarity' about debt deal

Marco Green
June 19, 2017

"It's a very constructive decision that will help Greece, also on the worldwide market, to gradually get more credibility", Luxembourg Finance Minister Pierre Gramegna said after the meeting.

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European creditors on Thursday approved giving Greece 8.5 billion euros ($9.5 billion) in bailout cash to meet a big summer repayment and promised that the burden of the country's future debt repayments would be eased. "We are now going into the last year of the financial support program for Greece; we will prepare an exit strategy going forward to enable Greece to stand on its own feet again over the course of next year".

Among the measures offered to Greece was a possible 15-year extension in debt and interest payments due European creditors. In essence, that could mean payments could be postponed in the event of an adverse shock.

But ministers said that while Greece would get more "clarity" on a long-desired agreement on cutting its mountain of debt, there could be no actual deal on that subject until later. In addition, he said Greece's growth levels could be taken into account in its repayments.

"Optimistic", his Greek counterpart Euclid Tsakalotos said, marking a clear change to his more negative mood earlier in the week.

Speaking on the sidelines of a meeting of the eurozone's 19 finance ministers, Pierre Moscovici said the Greek government had respected its bailout commitments and that it's now time for the country's creditors to "take theirs".

"It is a new phase", he said.

"If everyone around the table makes a very slight and positive move in the right direction we should be able to find an agreement today", he said. It needs to be a "success", he added.

The IMF would join the Greek bailout, Lagarde told the news conference, offering Athens a standby arrangement of less than $2 billion, the length of which will be tailored to match the end of the euro zone bailout in mid-2018.

Eurozone ministers have struck a deal to unlock the latest tranche of Greece's bailout cash.

Greece has been living under austerity for more than seven years and its left-led coalition government recently legislated further cost cuts, including to pensions, in hopes of getting the long-delayed loan installment.

"We can't live on 300 euros" they chanted, with some waving sticks.

Germany, Europe's largest economy, is the biggest contributor to the rescue and its government has stipulated that in order for more money to be released to Greece, the International Monetary Fund must join the bailout.

For Greece, that would limit the amount it has to pay out on debt servicing each year, money it can use to help the Greek economy and society.

Greek Economics Minister Dimitri Papadimitriou accused German Finance Minister Wolfgang Schaeuble of being "dishonest" by blocking debt relief for Greece despite his acknowledgement that Athens has implemented significant reforms.

Meeting in Luxembourg on Thursday, they reinforced their commitment to extend Greece relief if needed and offered more specifics on what this could entail.

Other reports by Click Lancashire

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