Greek creditors report progress in talks for new bailout

Greek creditors report progress in talks for new bailout

Greece’s talks with its creditors on a vital third bailout are making “satisfactory progress”, the European Union executive has said in its most upbeat assessment so far.

The comments came as Athens stocks rebounded three days after their worst plunge in decades.

A European Commission spokeswoman, Mina Andreeva, said the lenders are hoping to finalise the €85bn agreement in time for a major Greek debt repayment in two weeks.

“We believe this is an ambitious yet possible timetable,” she said. “Our teams (have been) on the ground (for) almost two weeks, and they report satisfactory progress.”

The radical left government on Wednesday said Athens was hoping to avoid extending negotiations and having to seek an interim loan to cover the August 20 payment, worth more than €3bn to the European Central Bank.

Greece has already received nearly €240bn in rescue loans since it was drummed out of international markets in 2010.

But although it tamed budget deficits through severe spending and income cuts, tax hikes and market reforms, the country still requires a third bailout.

The terms of the new loan are being worked out in Athens in talks between government officials and lead negotiators from the European Commission, ECB and International Monetary Fund (IMF).

The Athens stock exchange gained 3.65% on Thursday, three days after its disastrous opening – when a sixth of listed companies’ value went up in smoke - following a forced five-week closure. Banks, which saw huge losses over the past three days, gained a collective 18%.

But state budget execution figures released on Thursday showed that last year’s modest primary surplus – which excludes debt costs – has been all but wiped out in the first half of 2015.

The January-June surplus was €238m, compared to €1.8bn a year earlier.

It was the latest in a string of gloomy figures this week, which reflected the damage wrought by the government’s forced decision to close Greek banks at the end of June, to stop depositors emptying their accounts.

Many Greeks feared that talks with creditors were heading for collapse, which would bankrupt the recession-plagued country and force it out of the euro currency union, rendering their savings worthless.

As a result of the capital controls, which remain in place although banks have reopened for limited business, manufacturing, as well as business and consumer sentiment, plummeted, while small businesses’ turnover halved in July.

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