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Eurogroup meets on Greece bailout amid IMF tensions - live updates Eurogroup meets on Greece bailout amid IMF tensions - live updates
(35 minutes later)
9.07pm BST
21:07
Greece could get bailout funds in two tranches
A few journalists in Brussels are reporting that Greece’s bailout payment is going to be split into two instalments.
Efi Koutsokosta of Euronews has the details:
Greek gov srcs: the bailout tranche of 10,3 bn euros will be given in 2 sub tranches (7,5 bn in June, 2,8 bn in Autumn) #Greece #Eurogroup
If so, that could mean that creditors aren’t totally happy with the measures approved by Athens last weekend. Or it could mean something else....
9.05pm BST
21:05
Over in New York, Wall Street has just closed for the night with gains across the board.
Banks and tech stocks led the rally, as investors appeared to stop worrying about the prospect of a US rate rise.
The Dow Jones index finished 211 points higher at 17,704 points, a jump of 1.2%, following a strong day in Europe.
8.54pm BST
20:54
Today’s problem in a nutshell:
#Greece #euro group ongoing as Schaeuble tries to square the circle of disbursing with the #IMF onboard while not giving any debt relief now
8.50pm BST
20:50
Rumblings of discontent in Brussels....
I hear that three #Eurogroup ministers are furious that Tsipras changed EKAS social benefit scheme without Institutions' consent.
Break (long in duration) at #Eurogroup for further talks on #Greece acc to @NikosSverkos https://t.co/6vBmJ7VBpQ
8.48pm BST
20:48
Greek government bonds traded at a six-month high today.
That’s thanks to hopes that Athens would receive the bailout funds needed to avoid another financial crisis.
Bond yields (the interest rate on the debt) fell sharply on Monday after MPs approved the austerity measures sought by creditors. They fell a little further today, as traders waited for developments in Brussels.
Ciaran O’Hagan, a strategist at Societe Generale, says investors are now looking for concrete moves on debt relief:
“The fall in Greek bond yields reflects optimism that the reforms passed by the Greek parliament pave the way for support from the Eurogroup later today....
If there is debt relief, you will see further outperformance.”
(thanks to Reuters for the quote)
Updated
at 8.48pm BST
8.31pm BST8.31pm BST
20:3120:31
The Eurogroup meeting is now entering its seventh hour.The Eurogroup meeting is now entering its seventh hour.
Greek journalist Yannis Karagiorgas sums up the mood:Greek journalist Yannis Karagiorgas sums up the mood:
#Eurogroup Waiting...Waiting... pic.twitter.com/0USR3QifuL#Eurogroup Waiting...Waiting... pic.twitter.com/0USR3QifuL
8.20pm BST8.20pm BST
20:2020:20
EU officials 'optimistic' over Greek bailout dealEU officials 'optimistic' over Greek bailout deal
Jennifer RankinJennifer Rankin
Here’s our latest news story from Brussels:Here’s our latest news story from Brussels:
Related: Eurozone officials hope to give Greece next tranche of bailoutRelated: Eurozone officials hope to give Greece next tranche of bailout
It begins thus:It begins thus:
European officials have voiced optimism that Greece could unlock the next tranche of bailout money even as an ongoing row between the country’s creditors threatens to plunge the eurozone back into crisis.European officials have voiced optimism that Greece could unlock the next tranche of bailout money even as an ongoing row between the country’s creditors threatens to plunge the eurozone back into crisis.
Greece’s international creditors remain deadlocked over how to reduce the recession-hit country’s €321bn (£245bn) debt mountain, worth 180% of annual economic output.Greece’s international creditors remain deadlocked over how to reduce the recession-hit country’s €321bn (£245bn) debt mountain, worth 180% of annual economic output.
The International Monetary Fund has threatened to walk away from the Greek bailout unless substantial debt relief is agreed, but Germany maintains there can be no changes before 2018.The International Monetary Fund has threatened to walk away from the Greek bailout unless substantial debt relief is agreed, but Germany maintains there can be no changes before 2018.
Going into the talks between 19 eurozone finance ministers in Brussels, Valdis Dombrovskis, the European commissioner in charge of the euro, said he hoped to see “an agreement in principle”, including on disbursement of bailout funds..... (click here for more)Going into the talks between 19 eurozone finance ministers in Brussels, Valdis Dombrovskis, the European commissioner in charge of the euro, said he hoped to see “an agreement in principle”, including on disbursement of bailout funds..... (click here for more)
UpdatedUpdated
at 8.21pm BSTat 8.21pm BST
7.50pm BST7.50pm BST
19:5019:50
The Greek delegation are briefing reporters in Brussels now, and confirming that talks are continuing.The Greek delegation are briefing reporters in Brussels now, and confirming that talks are continuing.
They’re also suggesting that Germany is pushing for changes to the austerity measures passed last Sunday.They’re also suggesting that Germany is pushing for changes to the austerity measures passed last Sunday.
#Greek govt officials say they remain optimistic that there will be an agreement tonight #Eurogroup#Greek govt officials say they remain optimistic that there will be an agreement tonight #Eurogroup
#IMF firm on its views on #debt while #Germany asks changes from #Greece on legislations that have already been voted, acc to Gr govt off#IMF firm on its views on #debt while #Germany asks changes from #Greece on legislations that have already been voted, acc to Gr govt off
UpdatedUpdated
at 8.05pm BSTat 8.05pm BST
7.49pm BST7.49pm BST
19:4919:49
Eleni Varvitsiotis, EU correspondent at Greek newspaper Kathimerini, says three outstanding issues must be resolved before Greece gets its aid tranche:Eleni Varvitsiotis, EU correspondent at Greek newspaper Kathimerini, says three outstanding issues must be resolved before Greece gets its aid tranche:
3 items have to b finalised for disbursement.A.Speeding up privitizations(old airport)b. Pension reform,smoothening EKAS c. Changes on NPL's3 items have to b finalised for disbursement.A.Speeding up privitizations(old airport)b. Pension reform,smoothening EKAS c. Changes on NPL's
EKAS is Greece’s Pensioners’ Social Solidarity Benefit, which is being cut back under the bailout programme (some wealthier pensioners are reportedly being told to hand back some recent payments).EKAS is Greece’s Pensioners’ Social Solidarity Benefit, which is being cut back under the bailout programme (some wealthier pensioners are reportedly being told to hand back some recent payments).
NPL means non-performing loans - the bad debts held by Greece’s banks , which are to be sold off.NPL means non-performing loans - the bad debts held by Greece’s banks , which are to be sold off.
7.35pm BST7.35pm BST
19:3519:35
Matthew Klein, one of FT’s Alphaville’s many blindingly-bright sparks, has been digging through Greece’s finances, and spotted something rather interesting.Matthew Klein, one of FT’s Alphaville’s many blindingly-bright sparks, has been digging through Greece’s finances, and spotted something rather interesting.
It’s all to do with Greece’s net debt (basically its gross debt minus the financial assets the country holds).It’s all to do with Greece’s net debt (basically its gross debt minus the financial assets the country holds).
The International Monetary Fund reckons those financial assets are worth just £3bn, a drop in the ocean compared to its debt mountain.The International Monetary Fund reckons those financial assets are worth just £3bn, a drop in the ocean compared to its debt mountain.
But Matt has discovered that the Bank of Greece has calculated it as £30bn - using the methodology recommended by the IMF itself.But Matt has discovered that the Bank of Greece has calculated it as £30bn - using the methodology recommended by the IMF itself.
It’s not really obvious why such a difference should occur - but it’s obviously important when assessing Greece’s financial health.It’s not really obvious why such a difference should occur - but it’s obviously important when assessing Greece’s financial health.
If you have any ideas why, please tell Matt here:If you have any ideas why, please tell Matt here:
Is the IMF under-counting the Greek government’s financial assets?Is the IMF under-counting the Greek government’s financial assets?
This is a real puzzle and no one seems to have a good explanation for itThis is a real puzzle and no one seems to have a good explanation for it
7.06pm BST7.06pm BST
19:0619:06
Greece 'expected' to get €11bn loan tonightGreece 'expected' to get €11bn loan tonight
Greece’s ANA newswire are reporting that eurozone finance ministers are likely to approve Greece’s €11bn bailout tranche tonight.Greece’s ANA newswire are reporting that eurozone finance ministers are likely to approve Greece’s €11bn bailout tranche tonight.
Here’s the story, hot off the Reuters terminal:Here’s the story, hot off the Reuters terminal:
Negotiations at Tuesday’s Eurogroup meeting are focusing on Greece’s debt, a source from the European Commission said, adding that Eurozone’s finance ministers are expected to approve the disbursement of the loan installment totaling 10.3 billion euros.Negotiations at Tuesday’s Eurogroup meeting are focusing on Greece’s debt, a source from the European Commission said, adding that Eurozone’s finance ministers are expected to approve the disbursement of the loan installment totaling 10.3 billion euros.
The same source said there are still some pending issues which will be included in the final statement. Commenting on these issues, a government source said they are not decisive and will be resolved summarily.The same source said there are still some pending issues which will be included in the final statement. Commenting on these issues, a government source said they are not decisive and will be resolved summarily.
But what about the showdown between Greece’s creditors?But what about the showdown between Greece’s creditors?
As we’ve reported earlier, the two sides are someway apart. ANA says:As we’ve reported earlier, the two sides are someway apart. ANA says:
On the issue of the country’s debt, the distance between the IMF and Germany is still great and the aim is to achieve greater convergence today. The Commission source said that after pressure by the IMF, the weight has shifted towards measures that will be taken in the short term. However, Eurozone officials hope some deal will eventually be achieved with the IMF tonight, as there’s political pressure to avoid reviving the crisis.On the issue of the country’s debt, the distance between the IMF and Germany is still great and the aim is to achieve greater convergence today. The Commission source said that after pressure by the IMF, the weight has shifted towards measures that will be taken in the short term. However, Eurozone officials hope some deal will eventually be achieved with the IMF tonight, as there’s political pressure to avoid reviving the crisis.
6.51pm BST6.51pm BST
18:5118:51
Let’s fill the time with some dispiriting Greek charts, via Open Europe analyst Raoul Ruparel:Let’s fill the time with some dispiriting Greek charts, via Open Europe analyst Raoul Ruparel:
IMF forecasting #Greece double digit unemployment 4 decades, worth remembering rarely had single digit unemployment pic.twitter.com/AvNOOds484IMF forecasting #Greece double digit unemployment 4 decades, worth remembering rarely had single digit unemployment pic.twitter.com/AvNOOds484
Safe to say the IMF has tempered its expectations of privatisation revenue in #Greece (rightly so) pic.twitter.com/FNamIxPCCASafe to say the IMF has tempered its expectations of privatisation revenue in #Greece (rightly so) pic.twitter.com/FNamIxPCCA
6.42pm BST6.42pm BST
18:4218:42
Brussels correspondent Jennifer Rankin says there’s no sign when the talks about Greece’s bailout, and other eurozone economic issues, will end.Brussels correspondent Jennifer Rankin says there’s no sign when the talks about Greece’s bailout, and other eurozone economic issues, will end.
Eurozone meeting on Greece goes on, no one ready to say yet when it will end. https://t.co/LEsMHSpbcWEurozone meeting on Greece goes on, no one ready to say yet when it will end. https://t.co/LEsMHSpbcW
Last time, the eurogroup were done and dusted by around 7pm local time (6pm BST).Last time, the eurogroup were done and dusted by around 7pm local time (6pm BST).
But regular crisis watchers will know that these meetings have a nasty habit of running on towards midnight....But regular crisis watchers will know that these meetings have a nasty habit of running on towards midnight....
UpdatedUpdated
at 6.43pm BSTat 6.43pm BST
6.26pm BST6.26pm BST
18:2618:26
Greece’s former top central banker fears that the country is ill-prepared to exit its economic crisis.Greece’s former top central banker fears that the country is ill-prepared to exit its economic crisis.
Our Athens correspondent, Helena Smith, explains:Our Athens correspondent, Helena Smith, explains:
Former gov of Bank of #Greece Giorgos Provopoulos says he does not c "light at end of the tunnel" cos gov lacks "business plan" as#EG meetsFormer gov of Bank of #Greece Giorgos Provopoulos says he does not c "light at end of the tunnel" cos gov lacks "business plan" as#EG meets
Whatever is agreed at 2night's eurogoup will be politically expedient. Big Q is whether there can b recovery with such fundamentals?Whatever is agreed at 2night's eurogoup will be politically expedient. Big Q is whether there can b recovery with such fundamentals?
6.14pm BST
18:14
While we wait for progress at the Eurogroup, here are some more photos from today’s meeting.
5.37pm BST
17:37
But...
One of last-minute obstacles 4 review conclusion relates to #Greece PM announcement re creation of solidarity fund, acc to MNI (via @skaigr)
5.28pm BST
17:28
More optimism the Eurogroup’s talks will be constructive:
There are pending issues re 18 prior actions but not big enough to block disbursement, acc to official (via @capitalgr) #Eurogroup #Greece
The story is here (in Greek).
5.00pm BST
17:00
European markets end higher
Stock markets appear to have come to terms with the prospect of a US interest rate rise, perhaps as early as next month. Indeed, the idea of the Federal Reserve hiking rates put financial shares in the spotlight, on the basis that dearer borrowing costs could boost their balance sheets.
Meanwhile there was also optimism that a deal between Greece and its creditors could finally be reached at the Eurogroup meeting, despite tensions with the IMF over the country’s debt situation, thus releasing much needed bailout funds.
Another EU referendum survey showing the remain camp in the lead also helped support markets, as did another rise in the oil price. Tony Cross, market analyst at Trustnet Direct, said:
It’s been nothing short of a stellar day for the FTSE-100 as the market has shaken off earlier woes to forge a path higher, despite what could be construed as a raft of adversity. Public sector borrowing was higher than expected and Bank of England officials painted another gloomy picture over the economic outlook in their parliamentary appearance. The saving grace however appears to have been a combination of that latest Brexit survey data showing the Remain camp forging its way ahead, plus the fact that oil prices are evidently ascending, too.
The final scores in Europe showed:
On Wall Street, the Dow Jones Industrial Average is currently up 215 points or 1.23%.
As for oil, Brent crude has climbed 0.54% to $48.61 a barrel.
3.56pm BST
15:56
Schaeuble looking surprisingly happy... pic.twitter.com/U2G5RbDWXS
3.45pm BST
15:45
Here’s AP’s summary of the comments ahead of the Eurogroup meeting on Greece:
The eurozone’s top official expressed optimism Tuesday that Greece’s creditors will approve its reform efforts, paving the way for the payout of a new batch of rescue loans that would keep Athens from defaulting on its massive debts this summer.
“I hope that there is full agreement between the institutions, that we can move on in the program,” said Jeroen Dijsselbloem, the head of the eurogroup of finance ministers, as he arrived for the talks in Brussels.
Greece’s parliament passed a bill over the weekend on a series of measures that creditors had demanded. They included tax hikes, more budget-cutting reforms and a new privatization superfund, which will manage almost all state property.
The next step for creditors would be to find a way to lighten the country’s debt load, which mainly consists of past rescue loans from eurozone states. Greece’s debt is predicted to reach more than €333bn this year, around 180% of its annual economic output.
“Greece needs room to breathe, it needs certainty. It’s made considerable efforts, and again this weekend,” said French Finance Minister Michel Sapin, referring to the reforms Greece passed.
On the question of debt relief, Dijsselbloem said there was no appetite for any outright cut to the value of the money Greece owes.
Rather, the creditors are likely to examine a possible lowering in the interest rates and possibly an extension of the rescue loans’ maturity dates, as called for by the International Monetary Fund. There are fears the IMF may even pull out of the bailout program if Greece’s debt burden is not lightened.
“An actual haircut of the loans will not happen,” Dijsselboem said. “What we can look at is the annual debt burden, so Greece can on an annual basis pay its debts. If not, we are ready to help them in the coming years.”
Senior EU officials believe the plans being drawn up by experts to address Greece’s short, mid- and longer-term debt needs will be enough to keep the IMF on board.
“There is a real added value to have the IMF on board, so it is not an option to go on without the IMF,” Dijsselbloem said.
3.09pm BST
15:09
Wall Street opens sharply higher
US investors have followed their European counterparts and moved back into the stock market, with continuing talk about an imminent Federal Reserve rate rise helping to lift financial stocks.
The Dow Jones Industrial Average is currently up 187 points or just over 1%, while the S&P 500 has added 0.7% and Nasdaq is 0.85% better.
In Europe, Germany’s Dax is 1.8% higher while France’s Cac has climbed 2%. The FTSE 100 is up 70 points or 1.1%.
But as the Eurogroup meets to try and resolve the Greek debt situation, the Athens market has slipped 1.27%.
2.51pm BST
14:51
Back with Mark Carney, and here’s our report on the Bank of England governor’s appearance at the Treasury select committee:
Related: Bank of England governor rejects accusations of bias over EU referendum
2.44pm BST
14:44
More comments made ahead of the Eurogroup meeting which should now be well underway:
Michael Noonan of Ireland is expecting agreement on disbursement for #Greece today, plus detailed discussion on debt relief roadmap.
And Eurogroup president Jeroen Dijsselbloem:
Greek bailout without IMF 'not an option,' says Dijsselbloem https://t.co/H9gHXAFsSI pic.twitter.com/tsCi8BCUMr
2.34pm BST
14:34
The International Monetary Fund is using its negotiating position to try and persuade the Eurogroup to make concessions in the Greek debt crisis, says the Centre for Economics and Business Research, and this may be its best chance to push its point of view.
But Cebr economist Danae Kyriakopoulou said:
Cebr warns against premature optimism that today’s meeting will mark ‘the end of the Eurozone crisis’. IMF policy is determined by its shareholders (represented by the board), rather than its staff. Politics matter much more to the former. And there is little enthusiasm in Germany for debt relief which would be hard to sell to the country’s voters.
On the other hand the Eurogroup will be unwilling to risk a crisis that could break up the Euro in the run-up to the UK Brexit vote on 23 June and the Spanish elections on 26 June, so arguably today’s meeting is the IMF’s best chance to use its negotiating power to force the concessions it believes are necessary.
The Cebr sees two ways the situation could develop:
1. The IMF backs off and avoids confrontation with the Europeans. This would continue the “extend and pretend” strategy that has governed the Greek crisis since it started. This would most certainly be bad for the Greek economy, as the IMF staff’s projections show. And, it could prove very damaging to Europe as it raises the likelihood of a default and Grexit further down the line – meaning that debt owed to European taxpayers (including in the UK) would never be repaid.
2. The IMF plays hardball and poses a painful dilemma to the Europeans. This would certainly be risky. A failure to agree could lead to another Eurozone crisis, possibly a Grexit. But it is in everyone’s interest that this is avoided. The debt relief itself need not take the form of an outright haircut. Some form of reprofiling, as outlined in the IMF’s DSA could do the trick. This would put the Greek economy on a more sustainable trajectory but would be costly politically to Eurozone leaders and may lead to political instability in the already-troubled union.