MARKET BRIEFING – LONDON OPEN 11.08.2015
After the through the night negotiations the final deal on the Greece’s bailout assistance was concluded. The agreement will keep the country in the Eurozone and avoid its bankruptcy.
“An agreement has been reached. Some minor details are being discussed right now,” a Greek government official stated in an interview to reporters, after 18 hours consuming negotiations with the country’s international creditors represented by the ECB, International Monetary Fund, the European commission and the European Stability mechanism rescue fund.
The details of the agreement have not yet been made public, and there is a possibility that the final amount of the financial assistance could exceed the initially indicated 86 billion euro.
The primary budget deficit target was agreed at 0.25 percent of the gross domestic product this year, and 0.5 percent of the primary surplus for 2016, 1.75 percent for 2017 and 3.5 percent surplus in 2018.
Furthermore, additional issues on conducting privatizations and handling non-performing loans in the Greek banking sector were also agreed on.
Greece needs a quick release of the funds in order to settle a 3.2 billion euro of the bond repayment due to the European Central bank on August 20, which will now proceed smoothly.
Besides, Athens hopes to receive 20 billion euro urgently, which is needed to support the country’s weakened banking system.
Another 12 billion euro of the total amount will be allocated for the debt repayments with 5.3 billion euro in payments will be going to the state suppliers.
Following the agreement, Greek parliament will have to approve the measures required by the international creditors, which should be made before the meeting of the euro-area finance ministers this Friday.
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