Greece strikes deal with EU creditors over reforms

Greece has struck a deal with its creditors on reforms the country must carry out in exchange for continuing to receive money from its €86bn bailout programme.

The deal, which encompasses pension cuts, a widening of the tax base, and other reforms has been months in the making and was closed during intensive talks this week.

Finance ministers are set to confirm the agreement at a meeting today in Malta, according to two people briefed on the situation.

Pierre Moscovici, the EU’s economy commissioner, said today’s meeting “is the day that everyone should commit to wrapping up the contours of an agreement”.

“It is time to chase away everything that creates uncertainty, and that worries investors,” he said.

The agreement eases the pressure ahead of looming deadlines in July for Greece to repay over €6bn of debt, something that threatens to economically cripple the country unless it receives another tranche of bailout aid.

The deal, which requires Greece to legislate now on reforms that it will roll out in 2018 and 2019, is a key stepping stone in bringing the International Monetary Fund into the bailout as a full financial partner, a key requirement for Europe’s largest creditor state Germany.

People involved in the talks said final issues that needed to be resolved this week included the sequencing of different reforms, and specifically when the pensions changes would take effect.

Jeroen Dijsselbloem, the president of the Eurogroup of euro area finance ministers, flew to Berlin yesterday for talks with his German counterpart Wolfgang Schäuble to the final outstanding points. Further negotiations were held early this morning in Malta.

Mr Dijsselbloem said on his way into today’s finance ministers’ meeting in Malta that the talks had “achieved results.”

The deal opens the door for technical teams to return to Athens to fine tune the reform package.

Further difficult hurdles must still be cleared, however, before the IMF will join the programme, notably political sensitive negotiations on debt relief, meaning it’s still not clear when Greece will get the next tranche of bailout aid.