Greece to Receive €7 Billion in Bridging Finance to Allow Bailout Negotiations
Thursday 16 July 2015 17.28
RTE News
Photo: Greek Finance Minister Euclid Tsakalotos (L) and Prime Minister Alexis Tsipras during a parliamentary session yesterday
Minister for Finance Michael Noonan has confirmed that Greece is to receive €7b in bridging finance to avoid it defaulting on its debts and allow time for it to negotiate details a new bailout programme.
Minister Noonan said that it would take around a month to negotiate a new bailout - and without bridging finance Greece would have gone into default.
He said €7b will be provided so that Greece can pay its debt to the International Monetary Fund and the ECB, and that will give Greece time to negotiate a new memorandum of understanding for the third bailout programme.
He said he was confident the deal on Greece was sustainable in the manner in which it is designed but said it would depend on implementation.
He also said the provision in the deal that European countries through the Commission would assist in increasing the public administration capacity of Greece - to run a modern economy and collect taxes - would give them the ability to make sure the programme succeeds.
Earlier, European Central Bank chief Mario Draghi said he has no doubt that Greece would repay its loans from the ECB and the IMF.
"On 20 July, we will be paid," as would the IMF, Mr Draghi told a news conference, referring to the deadline for Greece to pay back around €4.2 billion in loans from the ECB.
However, he conceded that doubts remain about the willingness and capacity of the Greek government to push through the economic reforms demanded by creditors.
"No matter whom you talk to, there are questions about implementation will and capacity," Mr Draghi said, adding that it was up to Athens to assuage such doubts.
He also said it was "uncontroversial" that some form of debt relief for Greece - whose debts amount to 180% of economic output - was "necessary".
An EU spokeswoman said last night's vote by the Greek parliament satisfies the initial terms of the reforms-for-bailout deal agreed at a 17-hour summit earlier this week.
"The authorities have legally implemented the first set of four measures agreed at the eurozone summit in a timely and overall satisfactory manner," spokeswoman Annika Breidthardt told reporters.
The Greek parliament adopted the set of reforms after Prime Minister Alexis Tsipras urged them to back the unpopular measures.
The package of measures, which had to be approved to open talks on a new multi-billion euro bailout, was passed with 229 votes for and 64 against in the 300-seat chamber.
Mr Tsipras required the support of pro-European opposition parties to push the measure through, leaving a question mark hanging over the future of his government.
Among the 39 Syriza rebels was former finance minister Yanis Varoufakis, who denounced the bailout deal as "a new Versailles Treaty" - the agreement that demanded unaffordable reparations from Germany after its defeat in World War I.
Greek Energy Minister Panagiotis Lafazanis said he would quit if Mr Tsipras sought his resignation.
"Alexis Tsipras is the prime minister of this country because of the will of the Greek people. We support him, we support the government, and even those of us who voted 'No' support the effort to exit the crisis," he said.
One Syriza member of parliament, Ioannis Balafas, described the result as "positive".
The main opposition party, New Democracy, voted with the leftist government, in a move their acting leader Evangelos Meimarakis said was a duty to the country.
"Parliament took the first important step towards a deal [with creditors], approving difficult measures. But the results of today's vote constitutes a serious division in the unity of Syriza's parliamentary group," a written statement by government spokesman Gabriel Salelaridis said.
In exchange for funding worth up to €86 billion, Greece has accepted reforms including significant pension adjustments, hikes to value added tax, an overhaul of its collective bargaining system, measures to liberalise its economy and tight limits on public spending.
It has also agreed to sequester €50bn of publicly owned assets into a special privatisation fund to act as collateral on the deal.
Meanwhile, the head of the European Stability Mechanism has warned of a collapse in the Greek banking system if the country does not secure a third bailout, saying this would have consequences for the entire eurozone.
"If everything should fail, then the Greek banking system will collapse," Klaus Regling, head of the ESM, told German broadcaster ARD, adding that the four biggest Greek banks were systemically relevant.
"If the four biggest systemically relevant banks in a country no longer work, this has grave consequences not just for Greece (...) but also for the whole eurozone", he said.
Reuters news agency reported that a Greek government official said there won't be a reshuffle announcement today.
Calls for Tsipras to hold discussions with rebels MPs
Constantine Micholos, President of the Union of Chambers of Commerce and Industry in Greece, has said it was imperative that tough austerity measures were passed in parliament to secure a new bailout.
Speaking to RTÉ's News at One, he said the revolt by some Syriza MPs against the reforms is an internal issue and that the most important factor is that there is an agreement, so that the necessary procedures can go through the eurozone.
He says it is now up to Mr Tsipras to hold discussions with the 39 rebel MPs as far as the continuation of this government.
"It is all very well for them to say they are against these austerity measures. I imagine every single Greek citizen is against austerity measures. The question is how necessary are they"
Mr Micholos said he believes the Greek opposition will remain on side as long as this deal is executed as per the agreement with the EU and the lenders.
In relation to the capital controls currently imposed in Greece for over two weeks, he says they will remain for quite some time.
Adding that crucial matters need to be addressed like import documents and export orders to be processed.
"We need to have the banking institutions up and working once again so we can return to a normal life"
RTE News
Photo: Greek Finance Minister Euclid Tsakalotos (L) and Prime Minister Alexis Tsipras during a parliamentary session yesterday
Minister for Finance Michael Noonan has confirmed that Greece is to receive €7b in bridging finance to avoid it defaulting on its debts and allow time for it to negotiate details a new bailout programme.
Minister Noonan said that it would take around a month to negotiate a new bailout - and without bridging finance Greece would have gone into default.
He said €7b will be provided so that Greece can pay its debt to the International Monetary Fund and the ECB, and that will give Greece time to negotiate a new memorandum of understanding for the third bailout programme.
He said he was confident the deal on Greece was sustainable in the manner in which it is designed but said it would depend on implementation.
He also said the provision in the deal that European countries through the Commission would assist in increasing the public administration capacity of Greece - to run a modern economy and collect taxes - would give them the ability to make sure the programme succeeds.
Earlier, European Central Bank chief Mario Draghi said he has no doubt that Greece would repay its loans from the ECB and the IMF.
"On 20 July, we will be paid," as would the IMF, Mr Draghi told a news conference, referring to the deadline for Greece to pay back around €4.2 billion in loans from the ECB.
However, he conceded that doubts remain about the willingness and capacity of the Greek government to push through the economic reforms demanded by creditors.
"No matter whom you talk to, there are questions about implementation will and capacity," Mr Draghi said, adding that it was up to Athens to assuage such doubts.
He also said it was "uncontroversial" that some form of debt relief for Greece - whose debts amount to 180% of economic output - was "necessary".
An EU spokeswoman said last night's vote by the Greek parliament satisfies the initial terms of the reforms-for-bailout deal agreed at a 17-hour summit earlier this week.
"The authorities have legally implemented the first set of four measures agreed at the eurozone summit in a timely and overall satisfactory manner," spokeswoman Annika Breidthardt told reporters.
The Greek parliament adopted the set of reforms after Prime Minister Alexis Tsipras urged them to back the unpopular measures.
The package of measures, which had to be approved to open talks on a new multi-billion euro bailout, was passed with 229 votes for and 64 against in the 300-seat chamber.
Mr Tsipras required the support of pro-European opposition parties to push the measure through, leaving a question mark hanging over the future of his government.
Among the 39 Syriza rebels was former finance minister Yanis Varoufakis, who denounced the bailout deal as "a new Versailles Treaty" - the agreement that demanded unaffordable reparations from Germany after its defeat in World War I.
Greek Energy Minister Panagiotis Lafazanis said he would quit if Mr Tsipras sought his resignation.
"Alexis Tsipras is the prime minister of this country because of the will of the Greek people. We support him, we support the government, and even those of us who voted 'No' support the effort to exit the crisis," he said.
One Syriza member of parliament, Ioannis Balafas, described the result as "positive".
The main opposition party, New Democracy, voted with the leftist government, in a move their acting leader Evangelos Meimarakis said was a duty to the country.
"Parliament took the first important step towards a deal [with creditors], approving difficult measures. But the results of today's vote constitutes a serious division in the unity of Syriza's parliamentary group," a written statement by government spokesman Gabriel Salelaridis said.
In exchange for funding worth up to €86 billion, Greece has accepted reforms including significant pension adjustments, hikes to value added tax, an overhaul of its collective bargaining system, measures to liberalise its economy and tight limits on public spending.
It has also agreed to sequester €50bn of publicly owned assets into a special privatisation fund to act as collateral on the deal.
Meanwhile, the head of the European Stability Mechanism has warned of a collapse in the Greek banking system if the country does not secure a third bailout, saying this would have consequences for the entire eurozone.
"If everything should fail, then the Greek banking system will collapse," Klaus Regling, head of the ESM, told German broadcaster ARD, adding that the four biggest Greek banks were systemically relevant.
"If the four biggest systemically relevant banks in a country no longer work, this has grave consequences not just for Greece (...) but also for the whole eurozone", he said.
Reuters news agency reported that a Greek government official said there won't be a reshuffle announcement today.
Calls for Tsipras to hold discussions with rebels MPs
Constantine Micholos, President of the Union of Chambers of Commerce and Industry in Greece, has said it was imperative that tough austerity measures were passed in parliament to secure a new bailout.
Speaking to RTÉ's News at One, he said the revolt by some Syriza MPs against the reforms is an internal issue and that the most important factor is that there is an agreement, so that the necessary procedures can go through the eurozone.
He says it is now up to Mr Tsipras to hold discussions with the 39 rebel MPs as far as the continuation of this government.
"It is all very well for them to say they are against these austerity measures. I imagine every single Greek citizen is against austerity measures. The question is how necessary are they"
Mr Micholos said he believes the Greek opposition will remain on side as long as this deal is executed as per the agreement with the EU and the lenders.
In relation to the capital controls currently imposed in Greece for over two weeks, he says they will remain for quite some time.
Adding that crucial matters need to be addressed like import documents and export orders to be processed.
"We need to have the banking institutions up and working once again so we can return to a normal life"
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