Eurogroup approves launch of Greece bailout talks

Eurozone finance ministers approved the launch of formal bailout talks with debt-wracked Greece on Thursday, after the Greek parliament pushed through a raft of tough reforms set as the condition to open the negotiations.

“The Eurogroup welcomes the adoption by the Greek Parliament of all the commitments specified in the Euro Summit statement of 12 July,” the Eurogroup of the eurozone’s 19 finance ministers said in a statement after a conference call.

The ministers said the decision was based on an assumption that national parliaments, including in powerhouse Germany, would also approve opening negotiations on a massive 86-billion-euro bailout, Greece’s third since 2010.

The Eurogroup, led by the no nonsense Dutch Finance Minister Jeroen Dijsselbloem, said the decision to move forward was “on the basis of a positive assessment” by the institutions that will govern Greece’s bailout — the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).

The Eurogroup “concluded that the authorities have implemented the first set of four measures in a timely and overall satisfactory manner”, the statement said.

In an almost immediate reward to Athens for securing the start of talks, ECB chief Mario Draghi in Frankfurt said that a vital cash lifeline to Greece’s struggling banks would be raised.

The Commission, the EU’s executive and Greek creditor, also approved Greece’s delivery of key reform demands.

“The Greek parliament took an important step toward rebuilding trust with Greece’s international partners,” said commission spokeswoman Annika Breidthardt.

The Eurogroup statement did not mention whether ministers had discussed a three-month 7.0 billion euro bridging loan for Greece through an EU-wide crisis fund to hold Athens over until its new bailout is ratified.

Non-euro Britain and the Czech Republic resisted the use of this fund, but European officials told AFP that a compromise was in the works and could be finalised on Friday.

“We do think there are a number of solutions that could be found — our objective here is the principle that British taxpayers’ money should not be put on the line for a financial package for the eurozone,” a spokesman for Prime Minister David Cameron said.

Valdis Dombrovskis, the commission’s vice president for the euro, said “there is an agreement in principle” on the bridge loan, with “the procedure to be finalised by tomorrow at noon.”

Tsipras earlier this week agreed to tough reforms after 17 hours of gruelling negotiations at a summit from Sunday to Monday with fellow eurozone leaders in return for a third massive rescue programme.

To rebuild the trust they said was lost during six months of bitter negotiations with the Tsipras government, the eurozone leaders demanded that he immediately push through reforms on taxes and pensions even before actual negotiations on the details of the new bailout deal.

AFP

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