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Greece Reaches Preliminary Agreement with Lenders

Greece Reaches Preliminary Agreement with Lenders

Monday, 4 December, 2017 - 10:15
Greek Finance Minister Euclid Tsakalotos arrives for a cabinet meeting at the parliament in Athens, Greece June 13, 2017. REUTERS/Costas Baltas

Greece said Saturday it had reached a preliminary agreement with international creditors that it was meeting its commitments to unblock the latest tranche of a third bailout programme.

"We achieved the agreement with the institutions, at a staff level, on all issues," Greek Finance Minister, Euclid Tsakalotos told journalists.

"We are satisfied," he added.

The agreement on a range of often politically sensitive measures - covering fiscal issues, energy and labor market reforms, bad loans and privatizations - could open up fresh loans and push Greece further along the path toward a return to full market financing.

The key subject of the audit was the ongoing efforts to open up the Greek electricity and natural gas markets, which are currently dominated by state-controlled operators.

Another thorny issue was a proposed revision of a strike law, with the creditors hoping it will help reduce industry shutdowns.

There has also been a debate about maintaining low sales tax for Greek islands accommodating thousands of refugees and migrants

"The European institutions have reached a staff level agreement with the Greek authorities... This will be presented to the Eurogroup next Monday 4 December 2017. The Greek authorities plan to implement the prior actions necessary to conclude the third review as soon as possible', the team of creditors in Athens said separately in a statement.

The final agreement is expected to be ratified at the meeting of Eurozone finance ministers on January 22, provided the Greek parliament passes the reforms.

"I welcome the staff level agreement reached ahead of Eurogroup. Good news for Greece and Europe. Now focus on implementation of the reforms," European Commission Vice-President, Valdis Dombrovskis tweeted.

Greece has received three multi-billion euro bailouts since 2010.

The third rescue programme, currently financially supported by EU states but not the International Monetary Fund, runs to August 2018 and Athens then hopes to fully return to market financing.

By the end of September, Greece had received over 221 billion euros from European institutions and a further 11.5 billion from the IMF.

In July, Greece made a symbolic return to debt markets after a three-year hiatus, selling three billion euros worth of five-year bonds at 4.625 percent, lower than its previous outing in 2014.

Athens tested the market again earlier this month, offering to exchange some 30 billion euros in maturities originally issued in 2012.

According to the Greek finance ministry, more fixed-rate bond sales will follow.

European Economic Affairs Commissioner, Pierre Moscovici on Saturday hailed the preliminary agreement as "a strong signal of confidence to investors in Greece".

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