After a negotiations marathon that lasted 22 hours, the Greek government and its creditors reached an agreement on the 3. bailout for Greece. Information indicates that there have been compromises on both sides so that the deal could be sealed on technical teams level, some minor issues were still open.
“Some minor details were still being discussed,” a Greek official told Reuters Tuesday morning, something confirmed also by Greek finance minister Euclid Tsakalotos.
“We are very close. There are a couple of very small details remaining on prior actions,” Tsakalotos told reporters.
According to Greek media, both sides agreed not to take any new measures concerning the achievement of the budgetary targets for 2015-2016. Both sides agreed that budgetary targets will be
Primary Deficit of -0.25% of GDP for 2015, but Primary Surplus of 0.5% for 2016, 1.75% for 2017 and 3.5% for 2018.
The deal for the 3. bailout program is expected to be submitted to the Parliament later on Tuesday and be voted on Thursday.
The deal will be submitted to Parliament in one bill comprising two articles:
1. first article detailing the new three-year loan program
2. second article setting out the prior actions that Greece must legislate to get the first tranche of loan funding from the new bailout.
The exact amount of the bailout was not known Tuesday morning, but discussion were on a program of up to €86 billion.
A second Memorandum of Understanding will have to be approved by the Greek Parliament in October.
Eurozone ministers will take up the new deal on Friday via teleconference.
On Monday evening, prime Minister Alexis Tsipras held telephone convarsations with German Chancellor Angela Merkel, French President Francois Hollande, European Commission President Jean-Claude Juncker but also with European Parliament President martin Schulz.
According to Greek media, Germany insisted on a ‘bridge loan’, while Greece with support of France and EC favored a deal to be reached right now.
The 3, bailout foresees tough so-called “economic” or structural reforms” which are in reality strict and additional “austerity measures” that again will burden the poor and the needy.
According to daily Kathimerini that obtained the Draft of 3. Memorandum of Understanding (bailout program) of the Greek-Creditors Deal, some 27 austerity measures are expected to be implemented as soon as possible.
Among them are: scrapping early retirement, scrapping tax breaks for islands by the end of 2016, the deregulation of the energy market, the implementation of already planned privatizations.
But the austerity measures that will economically further ‘strangulate’ Greek households are: scrapping low-pensioners benefit (EKAS), increase of health contributions for pensioners without exemptions for the poor, re-introduction of unified property tax (ENFIA), scrapping tax breaks for fuel used by farmers, hikes of interest rates for debt-settlement of 100-installement, scrapping of the 25% cap for seizing salaries & pensions due to debts, scrapping the 1,500-euro cap for seizing bank deposits due to debts, new preconditions for ‘guaranteed minimum pension at the age of 67″, allowing foreclosures of first homes, indirect cuts in civil servants payroll. (More on the 27-page measures on Kathimerini in Greek)