Euro zone backs Greek aid extension, seeks clearer reforms

MARKETS RALLY

The Greek letter pledged not to reverse ongoing or completed privatisations, and to ensure that the fight against what the government calls the humanitarian crisis caused by bailout-driven austerity "has no negative fiscal effects".

The document, seen by Reuters, contained few figures but promised to improve tax enforcement, fight corruption and "review and control spending in every area of government spending". Dijsselbloem said Athens may be too optimistic about how much revenue the planned tax crackdown would generate.

Greek financial markets, which reopened for the first time since Friday's outline deal between Varoufakis and euro zone finance ministers, rallied strongly on relief that a meltdown had been averted for now.

Government bond yields dropped by three percentage points and stocks hit a 2-1/2 month high due even though the country's longer-term survival in the single currency remains uncertain.

Dijsselbloem, who is also Dutch finance minister, told EU lawmakers the euro zone could consider further debt relief if Athens met all the criteria specified in its November 2012 second bailout, "which hasn't happened yet".

He insisted a Greek exit from the euro zone had not been discussed and was not on the table, adding that the only government to have held a meeting to prepare for a possible "Grexit" was in non-euro Britain.

The ECB, which has been keeping Greek banks afloat with emergency liquidity assistance as deposits have flooded out, did not say when it might allow them to resume normal central bank funding using Greek government bonds as collateral.

In EU paymaster Germany, Finance Minister Wolfgang Schaeuble, who took the toughest line in the Greek negotiations, wrote to the speaker of the lower house of parliament requesting a vote this week on extending the bailout.

Germany's rejection of an initial Greek request for a six-month loan extension forced Athens into a string of politically sensitive concessions, postponing or backing away from campaign promises to reverse austerity, scrap the bailout and end cooperation with the "troika" of EU, ECB and IMF inspectors.

The letter said Greece would phase in collective bargaining with a view to raising minimum wages "over time" but promised that any changes would be agreed with its partners.

While Tsipras has won broad support in his coalition for the deal clinched in Brussels, some hardline leftists have criticised it and the conservative opposition has charged that his illusions have been punctured.

On Saturday, Tsipras called the tentative accord a victory for Greece, but participants said Athens was isolated in the talks and forced to make humiliating concessions because its banks were running out of cash.

Previous Page 1 2 Next Page

Previous Page 1 2 Next Page