Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Greece Reaches Bailout Agreement With Creditors

Posted by hkarner - 3. Mai 2017

Date: 02-05-2017
Source: The Wall Street Journal

Greek Finance Minister says there will now be negotiations with creditors on debt relief

ATHENS—Greece and its international creditors reached an agreement early on Tuesday on the austerity measures and economic overhauls the country must implement to keep its bailout program going, clearing the way for debt-relief talks.

“There is white smoke…Negotiations on all issues have been completed,” Greek Finance Minister Euclid Tsakalotos said after a marathon meeting with a delegation of creditors.

The agreement will release the next bailout disbursement Greece needs to make around €7 billion ($7.63 billion) in debt repayments in July. But more important, it sets the conditions for the creditors—the International Monetary Fund and the German-led eurozone—to discuss ways to ease the country’s mounting debt.

“I’m certain that there will now be negotiations on debt because there is no excuse,” Mr. Tsakalotos said.

Under the accord, Greece commits to further fiscal cuts—after its current bailout ends—through pension reductions equaling around 1% of gross domestic product in 2019, and a similar amount in 2020 from a reduction in the threshold for paying personal income tax.

Greece’s left-led government also committed to labor reforms, privatizations and overhauls to make its economy more competitive.

The two sides also agreed on a package of growth-enhancing measures mostly consisting of tax cuts that would be implemented if Greece exceeds its targets.

The basic terms of the deal were agreed upon at the last meeting of eurozone finance ministers in April and for the last several days, a delegation of international inspectors had been drafting a final agreement with Greek officials.

The IMF, which considers the country’s debt highly unsustainable, hasn’t officially joined the country’s bailout yet. To resume lending, it wants Europe to commit to substantial debt relief first.

Last week, the chairman of eurozone finance ministers, Jeroen Dijsselbloem, said a deal on Greece’s bailout, including an agreement on debt, could be reached in May.

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