Monday, June 26, 2017

Greece puts faith in France to solve bailout impasse

By on June 12, 2017

By Derek Gatopoulos

ATHENS — France’s finance minister is in Athens to try to hammer out details of an urgently needed rescue funding deal for Greece by the end of the week.

Bruno Le Maire held talks with Greek Finance Minister Euclid Tsakalotos on Monday, ahead of a meeting in Luxembourg on Thursday of finance ministers from countries using the euro currency.

Loan payouts from the eurozone countries have been delayed for months, but Greece urgently needs them as it faces a July spike in debt repayments worth some 7 billion euros ($7.8 billion).

In this photo taken on Wednesday, March 22, 2017 a woman passes a shopping arcade with Greek flags, where shops closed because of the crisis in central Athens. (Thanassis Stavrakis/AP)

Athens is also seeking a concrete pledge from creditors on debt relief, an issue complicated by disagreement among lenders over the country’s growth potential and debt sustainability.

Successive Greek governments have viewed France as an ally in bailout disputes, in contrast to the more fiscally hawkish Germans.

Investors continued Monday to anticipate an end to the months-long delay in reaching an agreement with bailout lenders.

Shares on the Athens Stock Exchange were roughly unchanged at 778.8 points following a weeks-long surge from just over 600 in early February, while market borrowing rates were also lower. Yields on two-year bonds dropped to 5 percent from above 10 four months ago.

Klaus Regling, head of the eurozone’s bailout European Stability Mechanism also appeared optimistic.

“I continue to be convinced that if Greece continues with its reforms, it can end the (bailout) program next year and will regain market access before the end of the program,” he said in an interview published Monday.

Left-wing Greek Prime Minister Alexis Tsipras pushed more painful austerity measure through parliament in successive votes that ended Friday, extending draconian budget cuts for roughly five years.

“All the conditions to end the (agreement delay) are there. There is no reason to get stuck again,” Greek government spokesman Dimitris Tzanakopoulos said in a weekend interview with pro-government Sto Kokkino radio.

While in Athens, Le Maire will also meet Tsipras and Bank of Greece Governor Yannis Stournaras.

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