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Greece and lenders agree new bailout deal, finance minister says Greece and lenders agree new bailout deal, finance minister says
(34 minutes later)
Greece and its international creditors agreed a new multibillion-euro bailout deal on Tuesday, in an accord which will keep the country in the eurozone and avert bankruptcy. Greece and its international lenders clinched a multibillion-euro bailout agreement on Tuesday after all-night talks, officials said, raising hopes that aid can be disbursed in time for a major debt repayment due in days.
After a 23-hour session which started on Monday afternoon, exhausted Greek officials emerged in a central Athens hotel to announce that both sides had agreed details of the deal, although a couple of minor issues remain.
The Greek finance minister, Euclid Tsakalotos, said on Tuesday that minor details were left pending in talks with lenders after all-night negotiations concluded on a new bailout package to keep Greece financially afloat. Related: Greece close to clinching €86bn bailout deal – live
Two or three small issues are pending with lenders, Tsakalotos told reporters after 18 hours of talks with the European Union, the European Central Bank and the International Monetary Fund in Athens. “Finally, we have white smoke,” a finance ministry official said. “An agreement has been reached. Some minor details are being discussed right now.”
Greece needs up to €86bn (£61bn) to stave off a financial meltdown and stay in the eurozone. At least €3bn is needed by 20 August to settle an ECB debt. The Greek finance minister, Euclid Tsakalotos, confirmed that “two or three small issues” remain pending.
Earlier, a senior Greek finance ministry official said the two sides had agreed on a wealth fund to handle privatisations, and how to address nonperforming loans in its banking sector. Both issues had been key sticking points in talks. The pact is expected to be worth up to €86bn (£61bn) in fresh loans for debt-ridden Greece, although there was no immediate confirmation of its size.
“Finally, we have white smoke,” the official said. Greek officials have said they expect the accord to be ratified by parliament on Wednesday or Thursday and then be vetted by eurozone finance ministers on Friday. This would pave the way to aid disbursements by 20 August, when a €3.2bn debt payment is due to the European Central Bank.
A deal would close a painful chapter of aid talks for Greece, which fought against the terms of austerity demanded by creditors for much of the year before relenting under the threat of being bounced out of the eurozone.
Still, popular misgivings run deep in Germany, which has contributed most to Greece’s two bailouts since 2010, about funnelling yet more money to Athens.
During talks, the sides agreed on final fiscal targets that should govern the bailout effort, aiming for a primary budget surplus – which excludes interest payments – from 2016, a government official said.
Adapted from an earlier baseline scenario, the targets foresee a primary budget deficit of 0.25% of GDP in 2015, a 0.5% surplus from 2016, 1.75% in 2017, and 3.5% in 2018, the official said.
The mountain of non-performing loans in the Greek banking sector were among the sticking points. Athens wanted to set up a “bad bank” to take on the problem loans, while creditors want the loans bundled and sold to distressed debt funds. It was not immediately clear how that was resolved.
Officials had also argued over how to set up a sovereign wealth fund in Greece designed to raise €50bn from privatisations, three-quarters of which would be used to recapitalise banks and to reduce the debt.
Both sides had agreed to deregulate Greece’s natural gas market, finance ministry sources said.