Key dates in Greece’s funding talks

Jeroen Dijsselbloem, chairman of the eurozone’s finance ministers, said the negotiations would take four weeks, although he acknowledged that “some call me an optimist”.

Greece also secured bridge financing of 7.16 billion euros on the same day for a three-month period to tide it over until the bailout package is agreed.

That money will be enough to see it through July, but would not cover payments due in August, notably 3.4 billion euros due to the European Central Bank (ECB) on August 20.

Greek government spokeswoman Olga Gerovasili said August 20 was the final date for an agreement.

Assuming agreement on a new set of reforms were reached by then, it would be likely to signed and ratified by some national parliaments in September. Before that, the International Monetary Fund (IMF) must produce an updated analysis of Greece’s debt sustainability.

The IMF has said it can only participate in a programme if the country’s debt sustainability is assured in the medium-term.

The ECB’s banking supervision arm will conduct a comprehensive assessment of the state of Greece’s banks after the summer to determine their capital needs. Up to 25 billion euros of the proposed bailout are earmarked for bank recapitalisation and possible resolution.

If a deal is ratified in September, a first quarterly review of Greece’s progress and economy would be conducted in December.

Eurozone countries have agreed to consider debt relief for Greece in the form of “possible longer grace and payment periods” once a first review is concluded positively.

The following are key dates in Greece’s funding talks with its eurozone partners, the ECB and the IMF, as well as a list of upcoming payments the Greek government needs to make.

JULY

22 – Greek parliament set to vote on second set of measures demanded by eurozone partners (after first set on July 17). The demands are for a major overhaul of the civil justice system to judicial process and reduce costs and the transposition in national law of EU rules on bank resolution, including “bail-in” mechanisms to ensure shareholders and creditors share the costs of a failed bank, rather than taxpayers.

AUGUST

20 – Greece due to redeem five-year bond held by European Central Bank, with principal and interest of 3.4 billion euros.

SEPTEMBER

Potential signing and ratification of third bailout programme under European Stability Mechanism

11 – Next scheduled meeting of eurozone finance ministers

OCTOBER

17 – Expiry of three-month bridge loan from European Financial Stability Mechanism.

DECEMBER

Potential first quarterly review of Greek progress in third bailout.

source: Reuters