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Sources: Details emerge on pending deal between Athens, institutional creditors

Leftist government maintains any deal won't include pension, wage cuts

Newsroom May 27 05:34

An increasingly cash-strapped and pressured Greek government on Wednesday hinted at the commencement of procedures for a “Staff Level Agreement” at a same-day Brussels Group session — a development that would signal the final stretch towards a deal with institutional creditors.

Government sources said Greek PM Alexis Tsipras continues to hold telephone contacts with top European and international leaders to “smooth over” obstacles and to finally achieve an extension of the second bailout package, which would free up 7.2 bln euros in favorable loans to the Greek state.

The same sources claimed the Greek side has not asked for an increase in the ELA ceiling, which is currently at 80.2 bln euros. A decision by the ECB’s board not to raise the ceiling was interpreted by some media as sending Athens a message not to expect more help on the liquidity front without a deal.

While a final text has still not been penned, some of the highlights leaked by the government on Wednesday include low primary budget surpluses for the next few years; no cuts in wages or pensions; what the leftist government calls “VAT reform”, and a “long-term solution for lessening the debt along with a developmental package.

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Missing are the exact figures, details and deadlines for the mostly sketchy, still, measures.

As far as the all-important social security front, what the government calls “reform” most likely means an end to early retirement — excluding individuals who have already enshrined their eligibility — as well as a further unification of Greece’s myriad of pension funds.

The same sources put the “blame” on the IMF for the ongoing failure to work out a deal, saying the Fund wants a comprehensive approach, and not a “fast and cursory job.” Conversely, the EU and ECB want an agreement by the end of May, or so the Greek side maintains.

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