Greece and its creditors have reached, on Tuesday (11), an agreement for the third rescue program, confirmed the Minister of Finance, Euclid Tsakalotos, which, however, acknowledged that there are still some ” small details “to close.
Athens raced against the clock to close until Tuesday to the package deal € 86 billion in an attempt to receive the first installment of money until August 20, when you need to make a payment to the European Central Bank.
Greece narrowly avoided the exit from the euro zone last month, after months of difficult negotiations that led to an agreement reached by Prime Minister Alexis Tsipras, who committed to fiscal austerity and reforms to avoid the economic collapse of the country.
negotiations Marathon
After 18 hours of negotiations, the parties were able to resolve the last differences and it is expected that in the coming hours the bill can be presented in parliament, in order to submit it to the vote on Thursday (13).
In this case, the Eurogroup (the finance ministers Eurozone) could validate the agreement on Friday. This would be the ideal schedule for Greece to start receiving money before August 20.
“We have white smoke,” said government sources around 8:30 am local time (2:30 a.m. GMT), after a day of lengthy negotiations which were only interrupted for a few hours so that Tsakalotos and Economy Minister, Yorgos Stahtakis, inform the prime minister, Alexis Tsipras, over the course of the conversations.
On leaving the meeting, Tsakalotos, visibly tired, said he was satisfied, but added that we still need to close “one or two small details.”
The bill, which will include both the rescue program as a first package of prior actions necessary for the first disbursement, will later on Tuesday in the legislative process in order to be voted on Thursday, and a day later, the Eurogroup can adopt it officially.
Greece was in a hurry to close the agreement in order to obtain the first disbursement before the 20th, the date on which payments are due to the European Central Bank (ECB) amounting to 3.4 billion euros.
One of the points set out in the final stretch of negotiations, with particular importance to Greece, was related to the budget goals.
Both parties agreed that Greece should not take additional measures to compensate for the deviation in the primary surplus goals that are estimated due to the strong economic backwardness recorded in recent months
Forecast
For the current year, Greece and institutions -. European Commission, ECB, International Monetary Fund (IMF) and Mechanism European Stability. – decided that, rather than a primary surplus of 1% of gross domestic product (GDP), you need only a primary deficit of 0.5%
In 2016 it was estimated a primary surplus 0.5%; in 2017, 1.75% and finally for 2018, of 3.5%, the goal that had been set initially.
Although for now not met the remaining details of the agreement, government sources They pointed out that also reached a compromise regarding the treatment that will give lengthy credits of banks – one of the main obstacles negotiation. – as well as the legal format that will have the new fund privatization
Greece hopes get on a first disbursement of 24 billion euros, of which 10 billion would be earmarked for recapitalization of banks, 7.2 billion to repay the bridge loan obtained from eurozone partners in July and another 5 billion to pay salaries to the IMF and the ECB in August and September
CASE SUMMARY
-. Greece faces a severe economic crisis to have spent more than he could
. – This debt was funded by loans from the International Monetary Fund (IMF) and the rest of Europe.
– On June 30, won a share of € 1.6 billion debt to the IMF. Then the country went to “default” (default status), which can result in its exit from the euro zone. This output is not automatic and if it happens, it may take. There is no mechanism of “expulsion” of a country in the euro zone. On July 13, another debt to the IMF ceased to be paid, of € 450 million.
– As the crisis became more severe, the banks are closed to prevent the Greeks saquem everything they have and break the institutions.
– Greece depends on Europe’s resources to keep its economy running. Europeans, however, require that the country cut spending and increase taxes to make more money. The deadline to renew such help also won on June 30
-.. On July 5, the Greeks went to the polls to decide whether they agree with the European conditions for the loan, and decided ‘no’
– European leaders agreed to a third rescue program for Greece, up to € 85 billion, but still require tough measures, such as tax increases, reforms in the pension system and more privatization.
– The Greek parliament approved on Wednesday (15) the first package of reforms to get money to pay off part of that owes to creditors. Thus, the Eurogroup gave prior approval to the loan.
– On July 17, the European Union approved an advance of € 7.16 billion aid package that has been negotiated so that the country does not give “default “in the payment of € 3.5 billion that has to do on Monday the European Central Bank (ECB).
– On 20 July, Greece paid the funds owed to the IMF and has been declared compliant by the body .
– Europe presses for Greece to accept the conditions and stay in the eurozone. That’s because an exit can undermine confidence in the world in the region and in the single currency.
– For Greece, euro exit the means to regain control of its monetary policy (which today is “outsourced” to the European Central Bank) , which can help exports, among other things, but must also close the country to foreign capital inflows and aggravate the economic crisis.
No comments:
Post a Comment