Greece, Creditors Plan to Open Bailout Talks

By Gabriele Steinhauser in Brussels, Nektaria Stamouli in Athens and Ian Talley in Washington 

        Greece and its creditors got ready to open talks to complete a bailout deal after Athens passed a required set of austerity measures, but the negotiations must still clear numerous hurdles before the country gets any aid.
        European officials welcomed the Greek Parliament's passage of a second batch of tough, new measures early Thursday, which creditors had demanded as a precondition to start talks on a rescue package of up to EUR86 billion ($95 billion). Greek lawmakers approved the economic overhauls "in a timely and overall satisfactory matter," a spokeswoman for the European Commission said, adding that negotiations "should now progress as swiftly as possible."
        Negotiators from the European Central Bank, the European Commission and the eurozone's bailout fund were set to return to Athens over the next couple of days for a first meeting with Greek officials, according to a Greek finance ministry official.
        International Monetary Fund officials are also expected to head to Greece to take stock of the economy and examine state balance sheets, though the IMF staff can't start bailout negotiations until the government officially asks for financing from the Washington-based fund.
        Still, a final deal faces an array of challenges, including growing skepticism over whether the bailout plan can return Greece's ravaged economy to health. The role of the IMF--whose involvement eurozone leaders have said is a prerequisite for a new Greek rescue program--also remains uncertain.
        On Thursday, a senior IMF official reiterated that the fund didn't yet know whether it would help finance a new bailout for Greece, putting pressure on Europe to sign on to a detailed debt-restructuring plan for Athens.
        "On the debt relief, there would need to be a specific, concrete commitment," said Gerry Rice, the IMF's top spokesman, in a news briefing.
        In recent weeks, IMF officials have repeatedly said that Greece's debt needs to be restructured to ensure the country isn't suffocated by its debt repayments. Eurozone officials have said that they are open to considering some limited relief for Greece but haven't given any definitive pledges, insisting instead that Athens first roll out its promised economic policies.
        Mr. Rice said another reason the IMF's participation is unclear is that the fund can't formally consider a third bailout until Greece asks for one. Athens has yet to submit a request.
        The IMF must then first do a detailed assessment of the country's finances and economy before it can begin finance negotiations, he said. It is unclear whether the IMF would then move forward with its existing bailout program for Greece, which expires in March, or create a new, long-term package.
        Officials are targeting a mid-August deadline to conclude negotiations for a comprehensive bailout program. The Greek government has said it hoped negotiations would be finished by Aug. 20, when Greece is due to pay some EUR3.2 billion owed to the ECB.
        For the past five years, the so-called troika of international inspectors has visited Athens regularly to assess the country's progress in implementing austerity measures.
        Since coming to power in late January, the government has tried to keep the troika out of Greece and shift the negotiations to Brussels instead. Eurozone governments, though, viewed that as an impediment to proper inspections and made the return of the troika to Athens one of the conditions for new talks about a bailout.
        Though he remains popular among voters, Greek Prime Minister Alexis Tsipras has fought a backlash from some members of his leftist Syriza party for turning around on his promises to reject more austerity.
        The second set of measures were supported by 230 lawmakers in the nation's 300-seat Parliament, after receiving backing by opposition parties. Some 31 Syriza members voted against the deal, one fewer than the number who had a rejected a first set of measures last week.
        The Parliament agreed to adopt new European Union rules for dealing with bank failures, which would require private investors to take a hit before taxpayer money could be used to bail them out, and a new civil-law code aimed at speeding up court cases.
        (END) Dow Jones Newswires

        July 23, 2015 16:57 ET (20:57 GMT)

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