NEWS

Greece making effort to tie up loose ends for bailout tranche

TAGS: Economy, Euro, Politics

Greek government officials and representatives of the country’s international creditors discussed on Thursday a series of “technical details” that Greece must legislate in order to secure a sub-tranche of 7.2 billion euros in loan funding, Finance Minister Euclid Tsakalotos and Alternate Finance Minister Giorgos Houliarakis said.

Houliarakis conceded that creditors want to see “a large amount of technical improvements” to legislation that Greece passed into law last week. In its provisions relating to nonperforming bank loans, which will henceforth be subject to sale, the government did not include loans guaranteed by the state. The omission was discussed by the ministers, creditor representatives and Bank of Greece officials during a teleconference.

Other topics of discussion were the long-delayed privatization of the site of Athens’s old airport at Elliniko. Creditors had expected Greece to sign a deal with investors by May 23. The interested investors have sought an additional month to complete the deal, Tsakalotos said.

The government must also clarify some aspects of a new privatization fund including the composure of its managing board and legal issues.

The ministers said that the solidarity fund heralded by Prime Minister Alexis Tsipras in Parliament before last week’s vote on the multi-bill will go ahead despite reports of objections by creditors. Tsipras said that 40 percent of Greece’s primary surplus would go into that fund.

Once the pending actions have been completed – and Greece’s bailout review – creditors will disburse the 7.5-billion-euro tranche, Houliarakis said. Of this sum, 1.8 billion euros is to go toward paying off state arrears to the private sector. The second sub-tranche, worth 2.8 billion euros, is to be disbursed in September subject to the completion of a new round of prior actions.

Commenting on the deal reached at this week’s Eurogroup summit regarding the country’s debt, Tsakalotos admitted that it was a compromise but underlined the significance of a decision to introduce an automatic mechanism to reduce the debt after 2018.

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