Greece’s government aims to reach agreement with creditors on a new bailout within the next two weeks, enabling it to make a 3.2 billion-euro ($3.5 billion) payment to the European Central Bank without further bridge financing.
Prime Minister Alexis Tsipras’s government plans to submit a bill to the Greek parliament by Aug. 14 approving the conditions attached to a loan facility from the European Stability Mechanism, according to a Greek government official. A vote would follow by Aug. 19, the day before the ECB payment falls due, the official said, asking not to be named as talks with creditors are private and ongoing.
Signs of optimism in Greece at progress toward a third rescue were reflected in the Athens Stock Exchange on Tuesday, which closed down just over 1 percent after losing more than 16 percent on Monday as it reopened following a five-week enforced break.
“The worst is over,” Italian Finance Minister Pier Carlo Padoan said at a Rome news conference Tuesday. Greece will be able to “get back on the road” toward economic growth, even if it’s not apparent until 2017, he said.
The Greek government’s timetable depends on the successful conclusion of negotiations with the quartet of the ECB, the International Monetary Fund, the European Commission and the ESM rescue fund. Remaining differences include a new privatization fund and the planning of bank recapitalizations, the official said.
Assuming those gaps can be bridged, Greece expects fellow euro-area governments to introduce their own respective bailout legislation between Aug. 12 and Aug. 14, with parliamentary approval for the loan following on from a positive vote by Greek lawmakers, the official said.
Greek bank deposits increased by about 1 billion euros since lenders reopened and capital controls were eased on July 20, according to a Bank of Greece official with direct knowledge of the matter.
An ECB-led review of the quality of banks’ books and a stress test will be completed by mid-October to help determine capital needs, said the official, who asked not to be identified because the information is private.