07 May, 2017
Greece has reached a preliminary agreement with its worldwide creditors on reforms needed to release the next instalment of its multi-billion-dollar bailout, BBC News reports.
The Greek government has agreed to impose more taxes and pension cuts on its citizens in order to pave the way for long-awaited debt relief talks with global creditors.
The government on Tuesday shifted its focus to securing specific debt commitments from the country's creditors after Greek officials and foreign auditors agreed on a raft of new economic measures following months of tough negotiations. Euro zone finance ministers would then discuss the disbursement of loans at the next scheduled Eurogroup meeting on May 22.
Greece has reached a deal with its creditors on austerity measures that will pave the way for talks to reduce Athens' massive debt burden.
The Greek parliament will have to approve the deal, but Prime Minister Alexis Tsipras's Syriza government is expected to be able to pass it with a small majority with coalition support.
After securing three global bailouts since 2010, Greece now owes most of its debt to its official European creditors and any further debt relief is expected to take effect after its current bailout expires in 2018.
Greece has been surviving on bailout loans since 2010 in return for harsh spending cuts and tax increases that have contributed to a sharp rise in unemployment and left more than a third of the population living in poverty or at risk of poverty.
The agreement with creditors was reached after a nightlong session of talks at a hotel in Athens. Yields on 2019 Greek government notes dropped 43 basis points to 5.95 percent as of 11:55 a.m in Athens, while the benchmark Athens Stock Exchange general index rose 2.6 percent.
Athens also hopes to be finally allowed access to the European Central Bank's asset purchase programme, known as quantitative easing, or QE, to help its return to bond markets.
According to reports, Greece also agreed to slash tax breaks by €3,000 from 2020 and sell up to 40% of state electricity provider PPC's coal mines.
Greece's largest public sector union ADEDY last week said it will stage a 24-hour strike on May 17 against the deal.
"It is now for all partners to reach an understanding on the question of Greece's debt in the coming weeks", he said. It suggests the primary surplus target be reduced to 1.5% of GDP thereafter. They are also more optimistic than the International Monetary Fund on what Greece can achieve fiscally, and argue a surplus target of 3.5% of GDP should remain in place for an unspecified number of years after the bailout ends in 2018.
