Greece, lenders reach deal on budget targets

Greece, lenders reach deal on budget targets

Greece and its international creditors have reached an agreement on fiscal targets for the following three years, amid their ongoing talks to secure a third bailout deal aimed at keeping the debt-ridden country afloat.

The Greek ANA news agency, citing a government source, said on Tuesday that Athens had agreed to a surplus of 0.5 percent next year, 1.75 percent for 2017, and 3.5 percent in 2018.

The source also said that Athens had committed to a primary deficit of 0.25 percent of output this year.

Greece and its lenders have been holding marathon negotiations over the finalization of a list of reforms and austerity measures the government must implement in order to receive another bailout worth EUR 86 billion (USD 93 billion).

Greece is trying to reach a deal with the International Monetary Fund (IMF), European Central Bank (ECB) and the European Commission – its international lenders – over the aid package it needs in order to repay EUR 3.4 billion (USD 3.7 billion) to the ECB by August 20.

Late Monday, Greek Finance Minister Euclid Tsakalotos voiced optimism over reaching a deal with the lenders.

“There are issues (the creditors) want to discuss again and again, but I think there should be optimism that there will be a deal soon… I don’t know if it will be tomorrow morning, but soon, it will be soon,” Tsakalotos said.

Damage control?

Greek Prime Minister Alexis Tsipras rose to power early this year on a platform of opposing the tough austerity measures that the country’s creditors imposed in exchange for previous bailouts. In June, he even called a referendum to have Greek people directly state their opinion on whether a proposed package would have to be accepted by the government or not.

While he urged a ‘no’ vote, and got it, too, Tsipras ultimately accepted the reforms demanded by the international lenders, sending a wave of shock and confusion to the people.

Tsipras has now promised to cut the lawmakers’ tax breaks and the ministers’ salaries in a move to ease domestic tensions triggered by his decision to raise taxes, overhaul the pension system and carry out privatizations as parts of the austerity measures.

Athens has received two bailout packages worth a total of EUR 240 billion (USD 272 billion) over the past five years.