Greece in talks with eurozone over precautionary support, PM says

Greece will accept some form of precautionary support to exit its bailout this year, Prime Minister Antonis Samaras said on Friday after several days of bond and stock market turmoil.

The premier’s comments suggest that Athens, its eurozone partners and the International Monetary Fund are reading from the same page with regard to the conditions that have to be in place for Greece not to receive further bailout funding beyond December.

From the Greek government’s point of view, this means not having to sign a new bailout agreement, or memorandum of understanding, but making a commitment to keep up structural reforms to secure the eurozone’s support for a bailout.

“It has been clear from Greece’s side that we don’t need a new bailout,” Samaras said in a statement on the sidelines of the Asia-Europe Meeting in Milan.

“In any case, we all agree that Greece will stick to the path of reforms. Therefore, there is agreement on the day after and there is a serious discussion with our partners and lenders on the first transitional phase.

“The discussion is about how we will move forward in the safest way,” he added. “A precautionary credit line that would protect the country from possible turbulence on the markets is part of the discussion.”

Samaras did not give any details on what form this standby financial support might take but, as Kathimerini reported on Friday, the government is examining the possibility of using money it has already borrowed for the recapitalization of its banks for this purpose.

The coalition expects around 10 billion euros to be left over in the buffer and believes that this could form the credit line it needs to provide comfort to investors as it prepares to issue new bonds next year.

“We can now stand on our own feet,” Samaras told Reuters on Friday. ”We have the resources to come out of the program.”

The prime minister accused SYRIZA of “worrying the whole world and the markets.”

He also attacked the opposition party for suggesting in a statement that the government’s commitment to primary surpluses is weakening confidence in Greece. “Does [Alexis] Tsipras think markets would celebrate if we returned to deficits?” asked the premier.

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