Troika and Greece agree to series of compromises

Work is under way on a new deal between Greece and its troika creditors after both sides agreed to a number of compromises.

Shortly after Greek Prime Minister Alexis Tsipras sat down to his first EU leaders meeting in Brussels, eurozone president Jeroen Dijsselbloem tweeted that they had agreed to start work on a technical assessment of the current bailout programme and the Athens government’s plans.

Taoiseach Enda Kenny confirmed after the meeting that representatives of the troika will work with Greek officials over the weekend and hope to have made sufficient progress by Monday when eurozone finance ministers meet to discuss it.

“This will be a very difficult and technical job,” he said.

Mr Kenny said that Mr Tsipras told his fellow EU leaders that the will of the Greek electorate had to be recognised and he did not want to break Greece’s contract with its creditors but believed that it needed to be reviewed.

The announcement came less than 24 hours after the Finance Minister, Yanis Varoufakis refused to agree a statement committing both sides to negotiations and having Greece acknowledge it would stand behind its previous commitments.

German Chancellor Angela Merkel gave an indication of the breakthrough when she arrived for the EU leaders’ meeting in Brussels last night.

“Europe, and this is Europe’s success, is always about finding a compromise,” she said.

Just of f a flight from Minsk where, alongside French President François Hollande she helped broker a ceasefire in Ukraine with Russian President Vladimir Putin, Mr Merkel said: “You make compromises when the advantages outweigh the disadvantages.

“Germany is ready for that, but you also have to say that Europe’s credibility depends on us sticking to the rules, and that we deal with each other in a reliable way.”

Bloomberg, quoting two officials in Berlin, said Germany would be willing to compromise on the size of the Greek budget surplus requirement, and on demands to sell off government assets.

Athens was willing to commit to a primary budget surplus provided it was lower than the current 4% of GDP and might be willing to compromise on privatisations. They are also committed to reforming the tax collection system and fighting corruption.

The head of Greece’s council of economic advisers, Giorgos Houliarakis, is due to meet today with Declan Costello of the European Commission, Klaus Masuch of the ECB, Rishi Goyal of the IMF and Thomas Wieser chair of the euro working group.

Commission president Jean-Claude Juncker said that “where one measure is cancelled, it will have to be replaced by another measure to produce the same revenue. If we use that as a basis we can try to reach agreement in the days ahead”.

Greece has to secure a deal that includes getting extra finance after the official bailout programme finishes at the end of February, which is needed to pay about €2.3bn to the IMF and roll over about €5.7bn of treasury bills mostly held by domestic banks, and to keep services running in the country.

Mr Dijsselbloem initially rejected a short-term financing arrangement until June, proposed by Greece, he later said this may be an option.