Greece and its creditors agree on a fiscal roadmap – Les Echos

Greece and its international creditors have continued throughout the night from Monday to Tuesday their negotiations on a third aid package which Athens needs to keep its public finances afloat and meet an important deadline to the European Central Bank (ECB) on August 20.

The government hopes to Alexis Tsipras quickly wrap up discussions to have the time necessary to vote the agreement by the Greek Parliament of here August 20, when he will have to repay 3.2 billion euros at the ECB.

“We are entering the final stretch, we review the MoU from beginning to end, “said a Greek manager during a brief pause in talks between Greek ministers and representatives of European institutions and the International Monetary Fund.

This final session Negotiations began Monday afternoon. After previous meetings Sunday and Monday, the Greek Finance Minister Euclid Tsakalatos said that discussions were going pretty well and he was confident that an agreement be “soon” found.

“I do not know if it will (Tuesday) morning, but soon, it means soon,” he has said.

fiscal roadmap

During the negotiations of the night, the two parties agreed to the budgetary targets the bailout program, targeting a primary surplus (excluding debt service) from 2016.

According to a government source interviewed by the Greek news agency ANA, the negotiators agreed that in 2015, Greece would experience a primary deficit (balance budget excluding debt payments) of 0.25% of GDP, the primary surplus of 0.5% of GDP in 2016, 1.75% in 2017 and 3.5% in 2018, the source said.

These objectives differ from objectives that Greece and its creditors worked until June At the time, they were considering that primary surpluses, 1% this year, 2% in 2016, 3% in 2017 and 3.5% in 2018.

But the Negotiators have considered the significant economic downturn looming over the country since coming to power in January of Syriza party Alexis Tsipras, stuck since in these endless negotiations.

Doubtful banks

Another official of the Athens government said that the management of bad debts banking sector was a sticking point in discussions. The two sides are also still no agreement on the implementation modalities of a sovereign fund to raise € 50 billion through privatizations.

Athens and Creditors have instead approved a deregulation of the gas market, said sources close to the discussions.

Capital injection for banks

Greek banks could quickly benefit from a capital injection from an agreement, an amount that could reach 10 billion euros, although the ECB has not completed stress tests the institutions.

These tests could indeed not be completed until October, when it is accepted that Greek banks are in urgent need of capital to normalize their operations.

Greek officials hope that the agreement on a new aid package will be adopted on Wednesday or Thursday by the parliament in Athens Friday and validated by the finance ministers of the euro area .

Source: Reuters, AFP