Germany's Schaeuble confident on deal on next Greek loan tranche

Marcus Newton
June 16, 2017

In an interview with ARD television on Thursday, Finance Minister Wolfgang Schaeuble said the IMF had agreed to launch a loan program for Greece - a condition set by the German parliament to support a further bailout - but that the global lender would pay out only later. The latest legislation extends budget cuts for roughly five years, beyond the end of Greece's third bailout program in 2018.

Ms Lagarde added: "In the case of Greece, AIP would allow the International Monetary Fund to be supportive of the progress made on policies, while release of resources under the International Monetary Fund arrangement would be conditional upon Greece's European creditors providing commitments for debt relief sufficient to secure debt sustainability".

"Greece has fulfilled its commitments and adopted the required reforms".

Greece's finance minister says financial markets now have "much greater clarity" about the future of Greece's debts, which will help the country regain market access when its current bailout program ends next year.

Euclid Tsakalotos, Greece's finance minister, said he is "optimistic" about the prospects of a deal later.

The accords gave enough clarity to investors on how Greece can manage its crushing debt burden that it should be able to borrow on the market again "in due course" after effectively relying on bailout support from other sovereigns since 2010.

"I am pleased to announce we have achieved an agreement on all elements", Eurogroup head Jeroen Dijsselbloem said after the talks reached a conclusion earlier than had been anticipated.

But in a mark of relief among the European Union's top leadership that the divisive crisis among member states seemed to be under control, European Council President Donald Tusk, who will chair a summit of EU leaders next week, tweeted: "Finally good news for Greece".

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Meanwhile, following efforts by the French government to include a proposal to make debt relief contingent on Greece's growth performance, a few more safeguards are expected to be added to the final agreement, the officials said.

One of the reasons why Greece's bailout program stalled over the past few months was a disagreement on debt relief between the eurozone and the International Monetary Fund, which contributed financially to Greece's first two bailouts but not the third.

In Athens, some 1,500 pensioners gathered to protest more than a dozen rounds of pension cuts since bailout-induced austerity was enforced seven years ago.

"We can't live on 300 euros (£260)!" they chanted, with some waving sticks.

Greece is hoping to secure more bailout funds to meet a summer debt repayment hump as well as a debt relief deal at a meeting of finance ministers from the 19-country eurozone.

The IMF had insisted repeatedly that Greece's debt is not sustainable and the country would require significant debt relief from Europe before the fund could approve a new loan programme.

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Greek Prime Minister Alexis Tsipras is set to get the cash he needs to meet some urgent payments next month to his creditors.

Other reports by MaliBehiribAe

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