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1st LD Writethru: Greece eyes bridge agreement next week, final deal on debt in September: gov't sources

Xinhua, February 10, 2015 Adjust font size:

Greece's new Left-led government was putting the final touches on Monday on the package of proposals for the transitional period of the post-bailout era Finance Minister Yanis Varoufakis will present to Wednesday's extraordinary euro group meeting, according to Finance Ministry sources.

Athens does not expect a dramatic breakthrough this week, as international lenders continued to add pressure on the Radical Left SYRIZA administration to stick to the austerity and reform drive accepted by previous governments since 2010 under bailout agreements and to forget about the pre-election debt write off demands.

However, the new government, which was elected after the Jan. 25 elections, was confident that a bridge agreement could be reached in next week's Feb. 16 euro group meeting and a final deal on the resolution of the Greek debt load could follow in September, government sources said on Monday.

Optimism was based on the fact that the ideas put forward were realistic and far from radical, they stressed.

The draft deal the Greek side planned to present to euro group on Wednesday envisages a bridging agreement lasting until the end of August, instead of June as initially planned, which will be replaced by the final new deal on Sept. 1.

In order to overcome creditors' reactions who have clearly said that euro group does not do bridge agreements Athens implied that it would not object if creditors would call this bridging deal a "technical extension."

Regarding the financing means of Greece during this transitional period, Greek government sources said that Athens will insist on the release of the 1.9 billion euros (about 2.15 billion U.S. dollars) in profits from Greek bond holdings owned by the European Central Bank and the raising of the ceiling on the issuance of Treasury bills which currently stands at 15 billion euros by 8 billion euros.

The Greek government will also push for a more flexible Emergency Liquidity Assistance (ELA) mechanism to support the banking system and the use of the 11 billion euros reserves of the Hellenic Financial Stability Fund to tackle the pressing issue of the non-performing loans. (1 euro = 1.13 U.S. dollars) Endit