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Greece: Parliament approves cut-down set of measures to release €1bn of bailout funds - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – Paolo Pizzoli, Senior Economist at ING, notes that as expected, the Greek Parliament approved a set of prior actions demanded by lenders for the release of €1bn of bailout funds.

    Key Quotes

    “The bill passed with 153 votes in favour (all MPs of the government coalition) and 138 against. All opposition parties voted against. The set of measures approved includes the creation of a new privatisation fund, jointly supervised by foreign and Greek officials, regulations on the sale to private funds of some large non-performing business loans held by Greek banks, a unified wage structure for civil servants and the auctioning of 49% of the Greek power transmission operator ADMIE.”

    “Crucially, the bill excluded other divisive issues, discussion of which has been postponed to January. These include firstly the pending pension reform, which has long been deemed by the institutions as a key stepping stone for the completion of the first review, and secondly the sensitive issue of whether also non-performing mortgages on primary residences could be sold by the banks.”

    “January’s discussions will likely be more problematic, and the thin majority of the current government coalition might eventually become an issue. Negotiators will likely stand ready to reach more compromises, as the prize for having these key reforms approved will be the start of the wrap-up of the first review of the third Greek programme.”

    “Only after the first review is completed, can talks on debt relief be finalized. Only then will it be possible to know for sure whether the IMF will also be brought on board in the third programme. As the debt relief issue has been topping Tsipras’ list of priorities from day one, we believe he will try hard to hold control of his MPs until the review is completed.”
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