Greece: Government, creditors near bailout compromise
Extent of protection to be afforded to home owners who cannot pay their mortgages only issue remaining on the table
The Greek government and its European creditors are close to reaching a compromise agreement which would release much-needed bailout funds.
The Eurogroup had imposed a deadline of Monday to arrive at an agreement on issues like protection from foreclosure for home owners who cannot pay their mortgages, taxes on private education, conditions for repayment for citizens who owe money on taxes and social security, and the minimum price on generic drugs.
Eurogroup President, Jeroen Dijsselbloem, in a tweet on Sunday, said that he “welcomes good progress in talks between Greece and institutions, agreement on many issues, EuroworkingGroup (EWG) will convene on Tuesday.”
The last meeting between the Greek government's economic team with representatives of the creditors ended at 5 a.m. on Monday. But the two sides will meet again at 2 p.m. in order to reach an agreement in time for the EWG meeting on Tuesday. At the meeting, there will be a final assessment of Athens’ compliance with the condition imposed by the third bailout agreement signed in July.
The Greek government is trying to obtain the release of €2 billion ($2.149 billion) in rescue loans and €10 billion ($10.74 billion) for the recapitalization of Greek banks.
Talks on the thorny issue of how many local home owners with non-performing mortgages should be protected from foreclosure have been dragging on since mid-October, holding up an agreement with the creditors who include the Eurogroup, the EU, the International Monetary Fund and the European Central Bank.
Both sides have agreed on protecting the poorest home owners, who hold 25 percent of the bad mortgages, but talks go on concerning the protection criteria for those belonging to middle class which represents between 58 percent and 60 percent of the non-performing loans.
Other issues that were finally resolved in the latest meetings included alternative fiscal measures to replace a revoked proposal for a value-added tax on private education; the regulation of conditions for citizens who owe tax and social security – the issues are the number of installments payments permitted to these debtors and the time in which they may make up payment for a missed installment -- and the establishment of a minimum consumer price for generic drugs.
The delay in reaching agreement on bad mortgages has help up the recapitalization of Greece’s major banks, which need the injection of funds to restart normal operations.
