Monday, June 26, 2017

Greece seeks bailout deal that will restore market access

By on May 31, 2017

ATHENS — Greece’s prime minister said Wednesday he will only accept a deal to restart loan payments from international bailout lenders if it soothes edgy investors enough for the debt-heavy country to “swiftly” tap markets with trial bond issues.

Alexis Tsipras said Greece will work hard over the next two weeks with its European partners and the International Monetary Fund to reach a “clear” solution by the next meeting of eurozone finance ministers on June 15.

“A clear solution for the Greek side will not create, or intensify, insecurity for investors,” he said in a speech to industrialists.

(Giannis Papanikos/AP)

“(That would be) a solution that secures stability, guarantees a dynamic for economic recovery and opens the way for Greece to tap money markets – initially, and swiftly, through trial issues,” that will allow the country to cover its borrowing needs from markets after its bailout program ends in September 2018, Tsipras said.

“That is the measure of success,” he added.

Earlier Wednesday, the European Union’s finance commissioner urged rescue lenders to “act responsibly” and reach an agreement with Greece.

Speaking in a video message , Pierre Moscovici said Athens had “delivered on its commitments” on reforms and budget cuts.

Greece is racing to conclude the deal ahead of a July spike in loan repayments, and earlier this month agreed to another round of austerity cuts that will see pensioners and salaried employees lose more of their income through 2020.

“We will do everything to conclude as soon as possible,” Moscovici said. “I will continue in the name of the (European) Commission to urge that all players act responsibly.”

His message was recorded in Brussels for an international conference on the Greek bailout taking place in Frankfurt, Germany.

The IMF and lead eurozone lender Germany are at odds over the degree of relief needed to make Greece’s massive national debt sustainable.

According to Greek officials, the IMF believes European projections that long-term economic growth in Greece can be maintained at 1.3 percent are too optimistic.

Moscovici maintained that the 1.3 percent target was realistic.

Greece lost market access in 2010 after radically underreporting key financial data. It has subsisted since on rescue loans, released on condition it implemented harsh income cuts, tax hikes and market reforms.
While the measures helped eradicate vast budget deficits, they contributed to a recession that cut more than a quarter off economic output, with unemployment hitting record peacetime levels.

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