Greece's Deal With Creditors Paves Way for Debt Relief Talks

by Eleni Chrepa & Sotiris Nikas

Bloomberg
May 2, 2017

Greece and its creditors from the euro area and the International Monetary Fund concluded months of negotiations regarding the second review of the country’s current bailout program after hours of final discussions that lasted until early Tuesday in Athens, unlocking discussions for the country’s debt relief.

Greece yielded to a number of demands set by its creditors, including pension cuts and a lower tax-free threshold of around 5,700 ($6,221) to 6,000 euros from 8,636 euros now. The agreement will also allow more shops to be able to work on Sundays in various areas throughout the country. “The discussion for an agreement that secures Greek debt’s sustainability now begins,” Greek Finance Minister Euclid Tsakalotos told reporters in Athens after the meeting.

If Greece beats its targets, the government will be able to implement a number of offsetting measures to ease the austerity burden, including subsidies for rent of as much as 1,000 euros per year, as much as 250 million euros in child support and lower contributions to medication for those of lower income, a Greek government official, who spoke on condition of anonymity said. Collective bargaining for Greek employees will be reinstated starting September 2018, the official said.

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