Euro finance ministers seek to conclude Greek bailout saga

Marco Green
June 24, 2018

Eurozone Ministers on Thursday will try to resolve their differences over the terms of Greece's departure from its massive bailout programme with splits over the degree of debt relief needed by cash-strapped Athens. The main stock index was up 1.6 per cent.

Euro zone finance ministers sealed a deal in the early hours of Friday to extend maturities and defer interest rates on a big chunk of loans to Greece, the most indebted country in the euro zone.

It also provides the country with enough ready cash to coast it over almost two more years, without having to resort to expensive global bond markets after bailout loans run out in August.

"The decision to stay on our European course was, I strongly believe it today, a decision made by the majority of Greek people".

European Commission President Jean-Claude Juncker said the deal "paves way for the successful conclusion of the program and a new chapter for the country".

"The Greek government is happy with the agreement", Greek Finance Minister Euclid Tsakalotos said after the talks.

European Economic and Financial Affairs Commissioner Pierre Moscovici spoke of a "historical moment for Greece" and said a new chapter was beginning for the country.

That will help Greece cover its financial needs for about 22 months after the end of its bailout in August.

Once the bailout is over, Greece will have to finance itself by borrowing on global bond markets.

An activist who urged Greeks not to pay their taxes, claiming he had access to enough money to pay off the country's enormous debt, has been remanded in custody pending trial on criminal fraud charges.

According to the source, Eurogroup ministers agreed that the final loan tranche to Greece will total 15 billion euros.

This, Greek officials said, might even be used to pay off the country's debts to the International Monetary Fund earlier than planned.

The agreement will end the eight-year debt-relief program for Greece, in which the country received 300 billion euros in three financial assistance programs as agreed in 2010, 2011 and 2015 in exchange for structural reforms and fiscal adjustments.

He added that he welcomed "the Eurogroup's readiness to consider further debt measures in the long term in case adverse economic developments were to materialize".

On the other hand, Greece must achieve ambitious primary budget surpluses - that is, surpluses that exclude the cost of debt servicing - of 3.5 percent until 2022, and an average 2.2 percent from then to 2060.

Other reports by Click Lancashire

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