Le Monde | • Updated | By
The marathon is nearing its end. The Greek government officially announced, Tuesday, August 11, an agreement with creditors was concluded, after negotiations that are chained day and night since 8 August for a third aid package amounting to “about 85 billion euros” for three years. According to a government statement, Greece “ensure” thanks to this money, in exchange for a long list of budget adjustments and reforms, “cover its loan repayments and state payment arrears “.
The European Commission acknowledged that an agreement ” technical principle “ was signed, but “we have not yet agreed at political level, and this is what we need.” “There is a technical agreement between the Heads of Mission of institutions and the Greek finance minister, it must now be discussed by the Eurogroup, “ confirmed to World a European source.
” The discussions are more peaceful “
The government of Alexis Tsipras and its partners, the European Central Bank (ECB), the International Monetary Fund (IMF), the European Commission and the European Stability Mechanism (ESM ) negotiating since July 20 the terms of an agreement allowing the country to receive a first installment of the third aid package before 20 August. At that time, Athens must indeed repay 3.5 billion euros of bonds maturing at the ECB.
“The discussions are more peaceful than in June and July, while the world is on the same wavelength, although some issues are still very sensitive “, told us that night, a source close to the negotiations.
From 8 am Tuesday local time, information leaked to a compromise on the budget targets of the country. The negotiators agreed that in 2015, Greece would experience a primary deficit (balance of budget excluding debt payments) of 0.25% of GDP, before recording primary surpluses of 0.5% of GDP in 2016, 1.75% in 2017 and 3.5% in 2018.
Until June, Athens and its partners were working on more optimistic goals. At the time, they planned primary surplus of 1% this year, from 2% in 2016, 3% in 2017 and 3.5% in 2018. “The sharp deterioration of the Greek economy from the end of 2014, which plunged into recession has forced us to review these objectives, “ says a source close to the European partners.
To understand the context of this negotiation : Greece and its creditors approaching an agreement on the third aid package
Thirty-five “priority measures”
The rest of the memorandum should be unveiled later in the day. Tuesday, August 11, the two sides were still discussing the creation of a fund to make the privatization and how to handle bad loans draping the Greek banking sector, two very sensitive issues.
D ‘ According to the Greek newspaper Kathimerini , which published Tuesday on its website an extract from the draft text of the agreement, twenty-seven pages include a thirty-five pane “measures priority “, to adopt this week, while other measures are passed in October. These “priority measures” are essential to some European countries, especially Germany, which want to ensure that Greece applies although the promised reforms.
D ‘ after Kathimerini , the priority measures concern the end of tax loopholes to farmers, lower prices of generic drugs, a full evaluation of the social protection system in order to record annual savings of around 0.5% of GDP, the gradual elimination of early retirement, the clarification of the VAT regime on the Greek islands or the reform of the energy market and gas, which would be liberalized from 2018 …
A program for the least loaded. To switch to the Greeks the most sensitive measures, the prime minister, Alexis Tsipras, announced outside the framework of the agreement, it would increase the tax rate of Deputies and reduce processing Ministers. “When the issue of the elimination of tax benefits for farmers is put on the negotiating table, we can not play the indifferent about our own benefits” , he said.
Read also: banks, Achilles heel of the Greek economy
A new marathon …
After Agreement Tuesday, a new marathon will start. The schedule is very tight. The Greek Parliament, which will interrupt his holiday for the occasion, will indeed adopt, probably Thursday, August 13, the draft memorandum governing the release of the new loan and a burst “priority measures” – that is to say further reforms and budget cuts.
In the process, the finance ministers of the eurozone (Eurogroup) will hold a conference call on August 14 to give their blank check to the text. National parliaments, which must rule on the subject, particularly in Germany, Finland and the Netherlands, then have a few days to give their agreement. A first allocation of aid could then be paid by the deadline of 20 August. The amount could be 25 billion euros, 10 billion of which would be spent on recapitalization of banks in the summer.
However, both Germany and Finland have not hidden their reservations about the signing of an agreement too quickly. Berlin, completeness preferring the speed was rather favorable to a new bridging loan, such as 7 billion euros granted in July. In case of delay in the process, such an option could be explored to enable the country to repay the ECB on 20 August.
Meanwhile, the Greek press speculates on elections legislative anticipated that Mr. Tsipras could decide to organize soon, in order to strengthen its parliamentary base. The left wing of Syriza is indeed strongly opposed the signing of the third agreement
Read our synthesis. What Greece accepted in return for financial assistance
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