Greece reaches preliminary deal with creditors: Minister

Promising to cut pensions and give taxpayers fewer breaks, Greece has paved the way for the disbursement of further rescue funds from international lenders and possibly opened the door to reworking its massive debt.VIDEO: REUTERS
Greek Finance Minister Euclid Tsakalotos arrives for a news conference at the Ministry of Finance in Athens, on March 30, 2017.
Greek Finance Minister Euclid Tsakalotos arrives for a news conference at the Ministry of Finance in Athens, on March 30, 2017. PHOTO: REUTERS

ATHENS (AFP) - Greece has reached a preliminary deal with its creditors that should pave the way for long-awaited debt relief talks, the Greek finance minister said on Tuesday (May 2).

"The negotiations are concluded," Mr Euclid Tsakalotos told reporters, according to state agency ANA.

After overnight talks, Mr Tsakalotos said a "preliminary technical agreement" had been achieved ahead of a May 22 meeting of eurozone finance ministers, which is required to approve the deal.

He added he was "certain" that the agreement would enable Greece to secure debt relief measures from its creditors, which he has said is vital to spearhead recovery in the country's struggling economy.

A compromise is required to unblock a tranche of loans Greece needs for debt repayments of €7 billion (S$10.65 billion) in July.

Under pressure from its creditors - the European Union, European Central Bank and the International Monetary Fund - the government agreed earlier this month to adopt another €3.6 billion in cuts in 2019 and 2020.

Athens conceded fresh pension and tax break cuts in return for permission to spend an equivalent sum on poverty relief measures.

A government source on Tuesday said pensions are to be cut by 9 per cent on average, ANA said.

The measures are to be approved by parliament by mid-May.

However, Prime Minister Alexis Tsipras has said he will not apply these cuts without a clear pledge later this month on debt-easing measures for Greece.

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.

Over 10,000 people demonstrated against the cuts on Monday, and a general strike is to be held on May 17.

Greece and its creditors agreed to a third, €86-billion bailout deal in July 2015.

But the IMF has so far refused to take part after two prior programmes on the grounds that the targets were unrealistic and Athens' debt mountain unsustainable.

Additional debt relief for Greece has proved a contentious point for many of its European creditors including Germany, where additional concessions are unpopular with a general election looming in September.