Athens eyeing loans but auditors want all loose ends resolved

Athens eyeing loans but auditors want all loose ends resolved

As Greek government officials expressed confidence that a loan tranche of 7.5 billion euros would be disbursed as early as next week, European officials were insisting that no money would be released until all pending issues have been resolved, however small.

On Wednesday night, members of the European Central Bank’s managing board were expected to discuss the prospects of reintroducing a waiver to the rule preventing Greek banks from tapping cheap liquidity from the ECB. Greek authorities are keen to get the waiver reintroduced without delay so that the ECB starts accepting Greek government bonds as collateral in its liquidity operations. However, a European official said that no decision would be taken until Greece’s creditors complete a review of the country’s progress in implementing reforms.

Several issues remained pending on Wednesday despite some progress made in negotiations in recent days. One bone of contention is that of bank loans that are backed by state guarantees. Creditors want restrictions lifted on the sale of such loans to distress funds but government officials oppose such a move.

The two sides converged in other areas, though. A teleconference that ran late into the night on Tuesday resulted in a compromise as regards the EKAS benefit paid to pensioners on low incomes. The benefit is to be cut from June 1 this year rather than retroactively from January 1 as creditors had initially demanded.

The government, which said it expected the bailout tranche next week, aims to vote the tweaks to reforms through Parliament by the end of the week. Then Greece’s creditors can compile a compliance report ahead of a Euro Working Group meeting scheduled for next Thursday which could give the green light for the release of funding.

In an address to his cabinet on Thursday afternoon, which is to be televised, Prime Minister Alexis Tsipras is expected to take stock of his government’s negotiations with creditors and set out a road map for legislation that might provide a boost for the economy such as a “growth bill” expected to be submitted in Parliament soon.

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