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ATHENS 'NEEDS $82bn'

Athens about $82 billion to meet its obligations.

EU, IMF agree new Greek bailout request

BRUSSELS, July 11, 2015

European Union (EU) and IMF officials have given euro zone governments a positive assessment of Greece's request for a new bailout, a source close to the matter said, making it likely they will agree on Saturday to open talks on lending Athens tens of billions of additional euros.

Experts from the European Commission, European Central Bank and the International Monetary Fund spent Friday reviewing the Greek case for aid and proposals for economic reforms from Prime Minister Alexis Tsipras that will be conditions for any loans.

The positive evaluation, along with a conclusion that Athens currently needs some 74 billion euros ($82 billion) to meet its obligations, will form a key part of discussions among euro zone finance ministers when they meet in Brussels at 3 p.m. (9.00 a.m. EDT).

With Greek banks shut and subject to capital controls for the past week, failure to agree a new program following five months of abortive negotiations had threatened effectively to force Greece out of the 19-state currency area, alarming EU leaders who have scheduled an emergency summit for Sunday.

One euro zone source, who has been skeptical of the leftist government’s commitment to a new reform program, said it was now “100 per cent certain” the ministers would agree to launch negotiations. In the meantime, they will also consider short-term aid to tide Athens over until the three-year loan deal that Tsipras requested has been agreed and funds can be disbursed.

Euro zone officials also expect to discuss Greek requests for some of its outstanding debt, currently worth some 175 per cent of its GDP, to be rescheduled, although the creditor governments insist they cannot legally write any off entirely.

Germany, which has contributed more to the previous two Greek bailouts since 2010 than any other country, sounded wary on Friday after Tsipras submitted proposals broadly similar to terms that Greek voters rejected in a referendum last Sunday.

But France, Greece's strongest supporter among the euro zone's major powers, rushed to offer praise. President Francois Hollande called the offer of reforms "serious and credible".

Dutch Finance Minister Jeroen Dijsselbloem, who chairs the Eurogroup of his euro zone peers and also the board of the European Stability Mechanism, which would provide any loans to Greece, described Tsipras's proposals as a "thorough piece of text" but he declined to go into specifics on Friday.

Elected in January to end the austerity that has accompanied previous rescue programs, Tsipras sought parliamentary backing for a new deal in a debate that continued into the early hours of Saturday. The vast majority of Greeks want to keep the euro. – Reuters




Tags: Greece | IMF | European Union | Debt crisis |

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