Reaching a deal with creditors is not going to be easy

Reaching a deal with creditors is not going to be easy

The government and the country’s creditors resumed their talks in Athens on Tuesday for the third bailout review, with the main topic being the launch of online auctions on Wednessday.

Monday’s decision by notaries to end their abstention may facilitate the auctions but does not ensure they will continue uninterrupted. A source from the creditors said the auctions’ start is a necessary condition for reaching a staff-level agreement by next Monday’s Eurogroup meeting.

The government is optimistic that the negotiations will be concluded by Saturday, with the creditors having sent Athens a draft agreement to study on Friday. According to a government source, the draft contains “many small technical points as well as issues that concern the application timetables,” where there remain certain differences between the two sides. They will form part of talks in the coming days.

Changes in calling a strike and family benefits and the course of the revenues and expenditure of the Single Social Security Entity (EFKA) are on the agenda of talks between the creditors and the Labor Ministry. The clause on increasing the quorum for calling a strike is ready and expected to be tabled in Parliament along with a number of other review milestones next week.

The same government source said that it will become clear by the end of the week if Athens will bring to Parliament one or more legislative interventions to meet requirements.

Reaching even a staff-level agreement will be quite a challenge given that less than 30 percent of the prior actions have been implemented to date. Should there be a deal, the government will pledge to legislate on the remaining milestones by January 22, when the Eurogroup will convene again, so that the eurozone ministers approve the disbursement of the 5.5-billion-euro installment.

That tranche may actually come with a part of the funds that are to constitute a liquidity cushion ahead of the country’s full return to the markets. The European Commission stated after the second review Greece that will receive 9 billion euros for that purpose.

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