Greece and lenders prepare for talks on new bailout
- 10th August 2015
- Business & Economy
The main financial story in Europe over the last few months has been the ongoing struggle of the Greek government to find a way to manage its debts.
It has been announced that talks are underway in a bid to agree a new bailout deal that could help secure the country’s future stability. The matter is all the more pressing because Greece’s next repayment to the European Central Bank (ECB) is on August 20th, and the country does not currently have the means to pay.
Representatives from throughout the EU, International Monetary Fund (IMF) officials and Greek ministers have resumed talks in a bid to strike an accord of €86 billion (£61 billion) in order to meet the repayment obligations.
Further bailout on the cards
It is hoped that a deal can be reached by Tuesday at the latest, to minimise the impact of economic uncertainty on European markets. If an agreement is reached, it will be Greece’s third European bailout in five years.
An unnamed Greek official told Reuters: "From 12 midnight the two sides started […] discussing the final stretch - combing through the final text, sentence by sentence, word by word."
However, the situation is much less tense than it was at the height of last month’s disputes, where it seemed that Greece would default on its debts, effectively forcing its exit from the Eurozone. However, the departure of finance minister, Yanis Varoufakis, in the wake of last month’s turmoil seems to have made Greece more amenable to striking a deal.
A spokesperson for the Greek government said: “There is a good [atmosphere] in the talks […] showing that this timeframe will be met.”
What happens next?
Once agreed, Greek ministers expect that eurogroup will ratify the accord on August 14th, ahead of being passed by Parliament on August 18th.
If the talks fail, then there is a possibility that Greece could ask for a short-term loan from another European fund, which has about €5 billion available.
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