Greece, Creditors Closer to Completion of Bailout Program Review

tsipras-tsakalotosAfter four hours of negotiations with creditors’ representatives late on Tuesday, Greece is coming close to the completion of the bailout program review.

Only one issue remains open, with the Greek side hoping that it will be resolved soon. Specifically, Athens is trying to protect bad loans that are guaranteed by the State, with lenders insisting that banks should negotiate the loans with distress funds.

Several details that were not ironed out were resolved after Tuesday’s teleconference between the representatives of the two sides who finally came to an agreement. The crucial issue regarding the retroactive return of supplementary pensions (EKAS) received since January 1 by 100,000 recipients who don’t qualify, was resolved with the ministry of labor proposing an equivalent dividend to be given to the above pensioners that will equal the money owed to the State.

The 80-million-euro fiscal hole from the EKAS will be covered by surpluses in security funds, the Greek government promised.

Creditors also backed down in asking for reductions on pensions received by people who were badly injured and are unable to work. They also backed down on permitting small and medium-size businesses operating in areas with less than to 2,000 residents to pay reduced contributions in security funds.

Creditors also have withdrawn their claim for full privatization of the Public Power Company subsidiary ADMIE, the Independent Power Transmission Operator. The previous agreement will remain, meaning that ADMIE will be separated from PPC and a new company will be established in which 49 percent of its share capital will be privately owned.

Negotiations between Greek and European technocrats will continue through Wednesday with the bulk of bills and amendments to be tabled in parliament on Thursday.

Once the review is completed, the green light will go on for the disbursement of the next loan tranche to Greece, amounting to 7.5 billion euros.