Greek Officials Say Debt Deal Will Be Reached At The Weekend
Greece’s Deputy Finance Minister Dimitris Mardas said Thursday that a debt deal with lenders will be achieved at this weekend to avert a catastrophic default and a Greek exit from the European Union (EU).
“I am confident and I believe that even a bad agreement will lead to better results than the lack of any agreement,” Mr. Mardas told local media, while the finance ministry once again extended bank holidays and capital controls from 29 June to 13 July.
When the measure was introduced to avoid a collapse of the banking system caused by the liquidity shortage, the current government had said that banks would reopen on 7 July, should a deal with creditors be sealed.
As Athens continues a new round of negotiations with lenders, the bank holidays have been extended to Wednesday and now to next Monday. The critical eurozone and EU summit in Brussels Sunday will decide whether Greece will get a deal and stay in the Eurozone or face an exit.
For a 2nd week, the 60-Euro-per-bank-account withdrawal cap from ATMs has been maintained according to a ministerial decree. Pensioners and the unemployed may draw up to 120 Euros per week from around 1,000 bank branches nationwide.
Holders of foreign debit and credit cards are exempted from the restrictions.
In a statement to local media on Thursday, Greece’s Bank Association chief Louka Katseli said that the Greek banking sector has enough liquidity until Monday. Should a debt deal be struck by then and the Emergency Liquidity Mechanism (ELM) resume its support, the banking system will gradually start functioning normally again, she said.
Asked about the risk of a haircut on deposits, she stressed that all deposits of up to 100,000 Euros per person are safe under European legislation.
Meanwhile, Greek Finance Minister Euclid Tsakalotos and his team are finishing the list of reforms that will be submitted to lenders by Friday morning in exchange for further aid.
According to government sources, by Thursday afternoon the list will be distributed to the leaders of Greek political parties represented in the parliament, who since Wednesday night have been informed of the developments achieved by Prime Minister Alexis Tsipras.
The same sources said that a 3rd bailout Greece formally requested from the European Stability Mechanism on Wednesday will add up to EUR 70-B over a 3-year frame.
Thursday evening Greeks mobilized by social media over the past month will hit the streets of Athens again in a rally to send the message that “Greece wants to stay in Europe.”
Another pro-government demonstration has been scheduled for Friday evening, as ruling SYRIZA party members assured that parliamentarians will approve a “viable deal” and that a rift with Europe is out of the question.
However, recent remarks made by some SYRIZA cabinet ministers and deputies indicated that Mr. Tsipras may face a rebellion within the party’s parliamentary group should the terms of the deal be considered extremely painful.
Stay tuned…
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Paul Ebeling
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