Finland backs Greek bailout deal

Berlin is the main creditor of Greece and its approval is needed in order for the new bailout package to be given to Athens so that it can repay Euro 3.4 billion (USD 3.7 billion) to the European Central Bank by an August 20 deadline. The Greek parliament will vote on over 50 measures on Thursday and is prepared to authorize – despite the queasiness of Syriza MPs – pension reform that eliminates privatizations and collective bargaining.

Greek prime minister Alexis Tsipras, however, believes that he has done his part fully, going beyond what the Eurosummit had asked of him by getting his parliament to approve today a “massive” reforms package and will have it vote on others by October, when the creditors expects the first review of the program on which every aid tranche depends.

A deputy to Finance Minister Wolfgang Schaeuble, Jens Spahn, told Deutschlandfunk public radio that the 400-page draft agreement between Greece and its creditors appeared to largely implement a watershed accord with European leaders from July.

“The whole German government. acknowledges that the Greek government has shifted a good deal“.

The role of the International Monetary Fund in the deal is ambiguous, according to Berlin.

The credit crisis sparked six years of recession in Greece, from which it emerged in 2014 before shrinking again. Economists had expected the economy to contract by 0.5pc.

Another €15 billion will be available before the end of the year, the sources said.

Spanish Prime Minister Mariano Rajoy said that the Eurogroup of eurozone finance ministers is scheduled to meet on Friday to discuss approval of the deal, BBC News reported. “Things are looking much better right now”.

“We need more details in some areas”. The path towards recovery has started. “Finland can not demand IMF’s participation but we will support it”, he said. “But monthly retail sales figures suggest that stronger household spending – perhaps in anticipation of capital controls – may have contributed to the expansion”, he said.

Data for seasonally adjusted gross domestic product rose 0.8% from the previous quarter, when economic growth was revised to zero by the Hellenic Statistical Authority, or Elstat.

“Greeks reportedly began paying off tax liabilities, possibly judging that their deposits might disappear but that their liabilities might not”. That stance made Wednesday’s cautious welcome to the Greek plan all the more significant. “The trouble is that the unexpected increase in the volume of output was offset by a fall in prices, leaving nominal GDP lower”.

“Greece will not give them the excuse”, he said.