Greece, creditors get down to business on bailout deal

Jul 27, 2015, 5:24 AM
A pedestrian looks at a board where people can write their comments about the Greek capital, displa...
A pedestrian looks at a board where people can write their comments about the Greek capital, displayed on a wall in Athens, Monday, July 27, 2015. The government has already begun imposing new austerity measures demanded in return for the new bailout -- but had relied on support from opposition parties after nearly a quarter of lawmakers in the ruling Syriza party opposed him. (AP Photo/Thanassis Stavrakis)
(AP Photo/Thanassis Stavrakis)

ATHENS, Greece (AP) — Technical talks over Greece’s third bailout in five years are poised to start in the next day or so as negotiators representing the country’s creditors continued arriving in Athens Monday.

The talks involving lower-levels officials, delayed from last Friday, are set to incorporate a wide array of issues such as pensions and labor market reforms.

They are designed to pave the way for high-level discussions between Greek ministers and top officials from the European Union and the International Monetary Fund that should start later this week.

Worries that the discussions over Greece’s bailout are dragging out have weighed on stock markets across Europe on Monday. The Stoxx 50 index of leading European shares was down 1.5 percent.

After passing a series of reforms demanded by creditors, the Greek government is hoping that negotiations on the bailout will be completed by Aug. 20 when the country has a big debt repayment of around 3.2 billion euros ($3.5 billion) to make to the European Central Bank.

Without the money due from the expected three-year bailout totaling around 85 billion euros, Greece would be unable to make that payment — a development that would likely trigger fresh fears over the country’s future in the euro.

Greece has already implemented steep sales tax hikes, and overhauled its judiciary and banking sectors, to secure the start of the third bailout talks.

Greek government spokeswoman Olga Gerovasili sought to downplay the fears in the markets about the delay and insisted that it was the creditors who decided when to get the talks underway. She said the talks will take place in a “hotel in the center of Athens,” without specifying.

Mina Andreeva, a spokeswoman at the European Commission, said negotiations “should now progress as swiftly as possible.”

“Teams from the institutions are now already on the ground in Athens and work is starting immediately,” she said.

She added that, while Athens has already delivered “in a timely and overall satisfactory manner” the reforms demanded for the talks to start, more will be required to secure a swift rescue loan disbursement.

“And this is also what is being discussed right now.”

Greece has relied on bailout funds for a little more than five years after being lock out of international bond markets. In return for around 240 billion euros worth of rescue money, successive Greek governments have had to enact a series of austerity measures and economic reforms.

Though the measures drastically contained budget overspending, they hit economic activity hard. Because the Greek economy is around 25 percent smaller than it was, the country’s debt burden has increased to around 170 percent of Greece’s annual GDP.

Some sort of debt relief for Greece is up for negotiation though a direct cut in the amount owed is off the agenda. The IMF has said Greece needs big relief and has advocated delaying Greek debt repayments to European creditors for many years.

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Greece, creditors get down to business on bailout deal