Greece On Track for Aid Before ECB Deadline, Rajoy Adviser Says

Greece Is No Longer a Financial Market Threat: Dan Morris

Greece is moving quickly enough to allow its European creditors to approve a third bailout before the country’s next crucial payment to the European Central Bank comes due, according to Alvaro Nadal, chief economic adviser to the Spanish prime minister.

The euro area should be able to hand over the first disbursement from the 86 billion-euro ($93 billion) aid program in time for Greece to make a 3.2 billion-euro payment to the Frankfurt-based central bank on Aug. 20, Nadal said in an interview Tuesday at Prime Minister Mariano Rajoy’s official residence in Madrid.

“We will be jumping the hurdles, one after the other,’’ Nadal said, predicting negotiations can be completed in about three weeks. “I thought it was more difficult to get the bridge loan or the weekend agreement and we did it.”

Greek Prime Minister Alexis Tsipras is ticking off the requirements for another rescue program after hammering out the terms in a 17-hour negotiating session with the rest of the euro area. The parliament in Athens will vote on a second package of economic reforms on Wednesday and is drawing up a final bundle of measures for approval in the first week of August.

The Greek government also expects to wrap up the talks in time to repay the ECB, spokeswoman Olga Gerovasili said Tuesday. Greece’s creditors plan to finalize the terms by Aug. 6 and disburse the first tranche by Aug. 17, an international official with knowledge of the matter said Monday.

Grace Period

The European Union already provided a 7.2 billion-euro bridge loan that helped Greece repay the ECB on July 20. Missing that payment could have prompted the central bank to pull the emergency funding keeping Greek banks afloat.

Nadal said the debate over whether Europe should write down the value of Greece’s existing debt or grant Tsipras easier repayment terms is a distraction from the more important issue of getting the country’s economy growing.

“We all know the volume of debt is very high, but the interest isn’t,” he said. “We can deal with that later on.”

Greece already has a 10-year grace period on interest payments on its 30-year rescue loans from the euro area and they account for more than 70 percent of the country’s total debt, Nadal said.

While Slovak Prime Minister Robert Fico said it will take a “miracle” for Greece to deliver all its commitments over the three years of the bailout program, Nadal said he’s confident Greece can comply.

“Why isn’t Greece able to do that?” he said. “Ireland has done it, Portugal has done it, Spain has done it.”

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