NEWS

Gov’t, lenders nearing deal on measures that will unlock loans

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Negotiations between government officials and representatives of the country’s international creditors continued late into the night Monday ahead of a scheduled assessment of Greece’s progress by the Euro Working Group on Tuesday.

The EWG is not expected to give the green light for the release of a 2-billion-euro tranche of rescue loans and another 10 billion euros in funding for the recapitalization Tuesday as the measures must be agreed on with creditors and approved in Greece’s Parliament.

Despite the delay, government sources aim to submit a draft of the remaining prior actions linked to the 2-billion-euro tranche to the House by tomorrow with a vote slated for Thursday.

The aim is for a scheduled EWG on Friday to approve the release of the funding, which is crucial to keep Greek state coffers from running dry and to allow the recapitalization of Greek banks to proceed.

On Monday night, however, Greek officials and foreign envoys were locked in talks in a bid to thrash out a compromise on pending issues.

According to sources, the two sides made significant progress in bridging their differences on the thorny issue of foreclosures and the protection of primary residences. Though there appears to be an agreement to protect a minimum of 25 percent of homeowners from losing their properties if they do not keep up with mortgage repayments, the aim is to introduce additional criteria that would lead to this protection extending to up to around 60 percent of mortgage holders.

Earlier in the day, foreign auditors had expressed doubts about Greek claims that some 540 million euros can be raised by imposing a small tax on games of chance (a measure intended to replace revoked plans for a value-added tax on private education). However, Greek officials presented them with additional data and the matter is understood to have been resolved.

Foreign envoys are to remain in Athens for a while longer to draw up a second list of prior measures which is linked to another 1 billion euros in loans. It is expected to comprise tougher measures including higher taxes on farmers.