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Greece sees deal by Tuesday

August 10, 2015

Athens has expressed hope of concluding negotiations for a third rescue program as early as Tuesday after reportedly agreeing with its creditors on reforms to be adopted before fresh cash can be paid out.

Symbolbild Griechenland Europa
Image: Milos Bicanski/Getty Images

After intense talks between Greece's finance and economy ministers with representatives of creditors on Sunday, a Greek government official told the news agency Reuters that efforts were being made to conclude the negotiations "by Monday night or early Tuesday."

On Monday, Reuters quoted the unnamed official as saying: "When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions."

Prior actions are a set of reforms needed to be legislated by the Greek parliament before the country's bailout lenders - the EU Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) - are willing to disburse 86 billion euros ($94 billion) in fresh loans.

Reuters also said Athens expected the draft memorandum of understanding to be approved by parliament on Thursday and put to a meeting of eurozone finance ministers on Friday for final review.

Greece narrowly avoided an exit from the euro currency area in July after months of acrimonious negotiations that culminated with Prime Minister Alexis Tsipras agreeing to a deal that included sweeping new austerity measures in exchange for cash.

Since then, negotiations on the agreement itself have proceeded remarkably smoothly, with the lenders praising Greece for its cooperation. However, Athens is under pressure to secure the fresh loans before August 20, when Greece has a repayment falling due to the European Central Bank.

Finland likely to break EU ranks

A third rescue program, which will raise Greece's debt from two prior bailouts to 326 billion euros, needs to be approved by several EU member states, including Germany and Finland.

But Finish foreign minister Timo Soini said Saturday that the Nordic country could refuse to participate in a third bailout for Greece amid mounting pressure from within his euroskeptic nationalist party, the Finns.

"Of course we can stay out of (the third bailout), that is possible," Timo Soini told Reuters on the sidelines of his party's congress. "We're really out of patience ... Our government has a very tight policy on this. We will not accept increasing Finland's liabilities, or cuts in Greece's debts."

Germany also believes that Greece's creditors should reach a comprehensive deal with Athens rather than a hasty agreement.

Stefen Seibert, spokesman for Chancellor Angela Merkel, said Monday that "comprehensiveness rather than speed" should form the basis of the negotiations because of the number of reforms that had to be considered and the length of the proposed rescue plan, which is expected to run for three years.

In case a bailout agreement does not materialize in time for Aug. 20, the EU may have to grant Greece more short-term aid to keep the country afloat.

uhe/ng (Reuters, dpa)