Greece fails to secure fresh bailout funds
- Author: Zachary Reyes May 24, 2017,
May 24, 2017, 4:42
Greece's worldwide lenders failed to reach a deal on Monday on additional debt relief measures for Athens after an 8-hour meeting in Brussels, the head of the eurogroup of eurozone finance ministers said.
Greece will receive billions of euros to repay the institutions it has borrowed money from in time for a crucial July deadline, avoiding another situation that could plunge the country into crisis - as when it almost defaulted on its loans in 2015.
"Both are possible and both perhaps should be done, and that I think will bring us to a more positive and definite positive conclusion at the next Eurogroup in June", Mr Dijsselbloem said.
Officials in Athens were hoping to secure the next installment of its multi-billion dollar bailout but talks reportedly broke down between Greece & Eurozone finance ministers in Brussels.
Pierre Moscovici said before the eurogroup meeting that a deal is "doable" and that it's time to "open a new phase, a new page" with regard to Greece.
The same countries, however, oppose a firm commitment of debt relief for Greece, fearing the disapproval of bailout-weary voters at home.
Germany has repeatedly warned that Greece's debt is unsustainable.
While Greek lawmakers approved a series of tax rises and pension cuts last week Athens also needs to pass a set of laws to make the reforms stick before the funds are unlocked.
Though the history of Greece's various scrapes with bankruptcy over the past seven years of its bailout era shows how matters can easily spiral out of control, the prevailing view in markets is that despite some caution, Greece will get its deal.
Talks foundered on the International Monetary Fund's insistence that it wanted to see more detail on planned debt relief action.
For the left-wing Greek government, which recently faced several days of strikes and demonstrations, an agreement on debt relief would be a political counterweight to the austerity measures taken since 2015.
The debt relief discussion is based on a promise made by the Eurogroup in May 2016 to extend the maturities and grace periods on Greek loans so that Greek gross financing needs are below 15 percent of GDP after 2018 for the medium term, and below 20 percent of GDP later.
Greek Finance Minister Euclid Tsakalotos attends a eurozone finance ministers meeting in Brussels, Belgium May 22, 2017.
Mr. Schaeuble later described reforms agreed by Greece as "remarkable" but said the Greek economy was not yet competitive and that Athens must press ahead with implementing its existing reforms-for-aid programme.