Home' Trinidad and Tobago Guardian : July 14th 2015 Contents A17
Tuesday, July 14, 2015 www.guardian.co.tt Guardian
FRANKFURT, GERMANY---Greece s bailout
deal isn t a deal---yet.
It only becomes one if Greece meets tough
conditions, like quickly passing a slew of
far-reaching economic reforms, cuts and
After the Greek government dismayed
creditors by repealing some economic meas-
ures and dragging its feet in negotiations,
key lender states led by Germany took a
hard line: Reforms first. Money afterward.
Whether the deal will then steer the Greek
economy back to health and help it lower
its debt remains uncertain.
"Doubts and concerns in our view out-
weigh optimism and euphoria," wrote
Carsten Brzeski, chief economist at ING-
DiBa in Frankfurt.
"It starts with the fact that there actually
is no deal, yet. It s a declaration of intent."
He recommended "that the champagne
bottles should still remain in the fridge for
What's the next step for Greece?
Under the deal struck with creditors dur-
ing an all-night meeting in Brussels, the
Greek parliament must approve key reforms
They include VAT tax increases and pen-
sion cuts, and safeguarding the full inde-
pendence of Greece s statistics service, which
at the start of the crisis in 2009 was found
to have woefully misstated the country s
finances for years.
More reforms have to be passed by July
20, including a new civil code that should
streamline legal proceedings and lower busi-
Will that help Greek banks reopen?
That s the intent.
Greece s banks have been closed since the European
Central Bank refused two weeks ago to allow them
to draw more emergency credit. Once the legislation
passes and Greece gets closer to financial rescue, the
ECB may decide to permit more credit. It could do
that anytime it can say a bailout deal is in the offing,
but may wait until Thursday s meeting of its governing
council---the day after the first Greek vote.
An increase in credit could enable the Greek banks
to reopen and perhaps increase their withdrawal
limit of 60 euros per day.
But analysts say some kind of limit on cash with-
drawals and transfers will likely stay in place for
months. The closed banks have made normal com-
merce impossible and worsened the recession. Getting
them open again is a top priority if the Greece econ-
omy is to recover.
After that, will Greece get its bailout?
Not yet. Germany s parliament must also approve
the start of negotiations, which officials said could
happen Friday. Austria and France will also hold
votes on the preliminary agreement.
What happens when negotiations start?
Once Greece passes the reform laws, the institutions
monitoring its finances---the European Union s exec-
utive Commission, the International Monetary Fund
and the European Central Bank---will get a mandate
to start talks. The Greeks will have to make more
reforms, such as opening up closed professions,
easing worker protections in labour law, and pri-
vatising the national electricity grid.
They will also have to transfer government-owned
businesses and assets into an independent privati-
sation fund that will sell them off.
And the eurozone says that s just to get the talks
started. At the end of the process, national parliaments
have to sign off in Germany, Estonia, the Netherland,
Finland, Austria and Slovakia. Only then can Greece
tap the money from the bailout fund, the European
How fast can Greece get the money?
The creditors acknowledge that time is short and
that a full bailout deal worth between €82 billion
and €86 billion over three years must be struck
quickly. Greece needs €7 billion by July 20 to cover
its bills and debt repayments, and an additional €5
billion by mid-August. It s already in arrears on a
€1.5 billion payment to another important creditor,
the IMF, and needs to clear that before it can get
more IMF loan money.
Will that stabilise Greece?
Even after it gets any loans, the country faces more
uncertainty as its economy will be in bad shape.
Whether the reforms will help get the economy
going, and how fast, is not clear. Some economists
think Greece s debts are too big to repay.
The bailout deal will face opposition in the ranks
of deputies belonging to Prime Minister Alexis Tspiras
Syriza group. Tsipras will likely have to resort to
opposition votes to get the painful spending cuts
and economic changes through.
The country s labour minister said yesterday that
the country could see new elections by the end of
So hold on. It s not a deal until it s a deal. (AP)
More twists and turns ahead for Greece
After the Greek government dismayed
creditors by repealing some economic
measures and dragging its feet in
negotiations, key lender states led by
Germany took a hard line: Reforms first.
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