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Greece, creditors fine-tune third bailout

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Greece debt crisis

Athens: Athens and its creditors were set today to put the finishing touches to a third international bailout agreement aimed at saving Greece’s stricken economy from collapse. The 400-page text has already been submitted to the Greek parliament for a crucial vote on ratifying the deal, which sets out the fiscal and other policy measures that Athens must take in exchange for the 85-billion-euro (USD 94 billion) lifeline.

Greek Prime Minister Alexis Tsipras called for MPs to vote on the accord Thursday, although the parliament websitedid not indicate when examination of the text would start. The Greek government and the European Commission said yesterday that they had reached the outlines of the rescue package, which calls for a gas market overhaul, ends most early retirement schemes, eliminates fuel price benefits for farmers and raises some taxes, among other measures.

The government said Greek banks — which were forced to shut down for three weeks as panicked customers withdrew billions of euros, fearing for the safety of their deposits — would immediately receive 10 billion euros from the package, and will be fully recapitalised by the end of the year. Greece and its creditors — the EU, the European Central Bank, and the International Monetary Fund — are under pressure to finalise the deal by next Thursday when Athens must repay some 3.4 billion euros to the ECB.


The European Commission said Athens and its creditors had reached a technical agreement “in principle” on what will be the debt-crippled country’s third bailout since 2010. But hours after Athens suggested the deal was all but done after marathon negotiations ended early today, Commission spokeswoman Annika Breidthardt said: “What we don’t have is a political agreement.” The draft deal comes after months of acrimonious negotiations between the creditors and Greece’s left-wing government, which came to power in January promising an end to years of painful austerity demanded in exchange for the cash.

Investors reacted with relief to news of the outline deal, with shares in Athens closing Tuesday 2.14 per cent higher four a fourth straight day of gains. But in early trading today the ATHEX index was down 1.68 per cent.

Both sides said details remained to be hammered out, and an EU source stressed it was still not certain that it would be finalised by next tomorrows ECB payment deadline — leaving open the possibility that Athens might need emergency funding.

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