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Monday, 10 August 2015

Greece's third bailout deal in final stretch (gov't sources)

Greece's marathon negotiations with international lenders to finalize the third Greek bailout deal in five years were in the final stretch on Monday and "white smoke" could emerge as soon as Tuesday morning, according to government sources.

After three weeks of intense deliberations on the terms of the new agreement between Greek ministers and envoys of the four institutions (the International Monetary Fund, the European Commission, the European Central Bank and the European Stability Mechanism) in Athens, the final draft was expected to be tabled in the Greek parliament on Wednesday, according to the sources.

Legislators of the ruling Radical Left SYRIZA party have been notified to return to Athens and be on standby by Friday, local media such as private MEGA channel television reported.

The government's aim is that the parliament ratifies the draft bill containing the third 86-billion-euro worth bailout and a list of prior actions on Thursday so that on Friday Eurogroup can clear the way for the disbursement of the first funds to Greece in coming days, the sources said.

On Aug. 20, Athens needs to repay a 3-billion-euro loan installment to European Central Bank and in the meantime other European national parliaments should also hold votes on the new bailout.

In case the prevailing optimism of a final deal "within hours" will not come true, the two sides are expected to agree to a new bridging loan to Athens to cover its financial obligations next week, as it had happened in July.

In return of the further financing to stay afloat and in the eurozone, Greece must commit to further austerity and structural reforms.

According to Greek government sources, the "final details" under discussion concerned the non-performing loans, the privatization fund and the deregulation of the energy market and some professions.

According to the same sources, the lenders suggested that "red loans" be sold to special funds, while the government preferred that a new management entity oversees their settlement.

Regarding privatizations, creditors seem to have requested the upgrade of the current fund so that outstanding privatizations can be completed soon. Athens leaned towards the creation of a new fund and did not want to hurry privatizations in order to secure better prices.

In regards to the prior actions, according to the sources, Greek farmers will lose tax breaks, such as subsidies for fuel. Their trade unions have already warned with strike actions in protest.

In a bid to ease reactions Greek Prime Minister Alexis Tsipras was in parallel pushing for changes in the taxation of salaries of law makers, ministers and public utilities chiefs.

"When the abolition of the farmers' allowances is on the negotiations table we can't remain indifferent over the tax exceptions applied for us," the Premier told cabinet ministers during a meeting on Monday, according to the Greek national news agency AMNA.

However, the Leftist leader seems to still be facing mounting pressure from a part of his party and therefore scenarios over an imminent rift and early general elections are widespread in local media.

About 40 legislators out of SYRIZA's 149-member strong parliamentary group voted against the July 13 eurozone summit agreement that paved the way for the third bailout and the first prior actions this summer.

SYRIZA lawmakers, who openly urge in recent weeks for return to drachma instead of a "catastrophic" third bailout, have warned that they will vote against party line also in the upcoming vote.

Stathis Leoutsakos, one of the leading dissidents called the government on Monday to "break off negotiations even today," speaking to local media. He predicted snap polls in the first half of September.

The government is not considering elections and talk of elections at this point is not useful, government spokeswoman Olga Gerovassilis responded in a statement shortly afterwards.

   Xinhua - globaltimes.cn
10 - 11/8/15

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