Greek government creditors reach agreement “on all 48 prior actions”

17 November 2015
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The Greek government reached an agreement with its creditors early on Tuesday morning, opening the way towards the disbursement of a 2-billion-euro subtranche and a 10-billion-euro recapitalisation of banks, following lengthy negotiations over a series of days.

“We have reached agreement on everything, including the 48 prior actions,” Finance Minister Euclid Tsakalotos said at the conclusion of the meeting.
A relevant omnibus bill will be tabled in Parliament on Tuesday, to be voted on by Thursday. It will include protection of the primary residence from auctions for defaulted loans, a 100-instalment payment of debts, and VAT equivalent measures in lieu of that on private education institutions.

Also on Tuesday (today), the Euro Working Group will be notified of the agreement. It is expected to convene on Friday to give the go-ahead to the European Stability Mechanism (ESM) for releasing the 2 billion euro subtranche.

According to a high-level official of the Finance ministry, the disbursement of the 10 billion euros for recapitalisation is expected to take place at a later date, because the banks need to complete their book offerings, a factor that will also help determine their funding needs.

Negotiations with the country’s lenders for the content of the second prior actions package is expected to begin today as well. This is connected to a subtranche of 1 billion euros.
According to FinMin officials, the strategy of handling the non-performing loans (NPLs or “red loans”) and their sale to foreign funds will be included in another draft bill in December. There is no decision yet on which of the loans will be sold – business, housing or consumer loans. NPLs must also be classified according to the amount and the economy sector they relate to, they said.

A protection from losing their primary residence to auctions is provided directly for 25% of borrowers with outstanding loans, and to a further 35% of borrowers as determined by income and asset criteria.

Among other provisions of the agreement, the government will set up a reserve fund of 100 million euros for poor and unemployed borrowers with outstanding debts whose installments will be paid by the state.

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