Third bailout deal with Greece possible before August 20 — EU Commission

Greece’s prime minister said his country was in the “final stage” of talks for a new bailout, as his left-wing government on Wednesday rejected the idea of extending the negotiations beyond this month.

Despite the grim news on the public finances, Greek stock markets bounced back yesterday, after three straight days of decline, with the main Athens index closing up 3.65%.

A deal must be must be settled by August 20, or a second bridge loan agreed, if Greece is to pay off debt of €3.5 billion to the European Central Bank that matures on that day.

Reuters said that a European Commission spokeswoman said earlier in Brussels that talks with Greece on a third bailout were moving ahead “in a satisfactory way” and reaching an agreement was possible before 20 August.

Alpha and Piraeus Bank both closed 29.6 percent lower, effectively at the 30 percent daily loss limit.

“All the reports I am getting suggest an accord this month, preferably before the 20th”, Juncker told AFP in an interview.

Mr Hollande, speaking to reporters in Egypt, said: “The objective is for the negotiations on the (bailout) programme to be concluded at the end of August”.

“The discussion today has to do with the prior actions for the first disbursement”, a Greek government official said, adding that the focus of the talks on Sunday would address “the more controversial issues in the bailout agreement”. “Banking shares are the ones we have the most doubts about”, said Konstantinos Botopoulos, head of the Greek financial markets commission.

On Wednesday the prime minister said Greeks had to “adapt to the new circumstances” but insisted that his administration would continue to negotiate with the country’s creditors to secure a “fair” distribution of tax pain.

Greek banks are in dire need of recapitalisation after a flight of euros from deposits for most of this year and mounting bad loans. In two earlier votes, Tsipras lost the support of as many as 39 of his own MPs, with several ministers resigning in protest at austerity measures.

“The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators”, said analyst Nick Koskoletos at Athens-based Eurobank Equities.

“We will reach an agreement because the British people always show themselves to be pragmatic when it comes to the essentials”.

The political outlook appears tenuous, with Panagiotis Lafazanis, a prominent dissenter and lawmaker of the ruling Syriza party, urging colleagues to join him in voting against the government when the bailout deal is brought to parliament. He said ministries would coordinate to help relieve the burden on distant islands and that a special unit would be set up to make use of dedicated EU funds to beef up border controls and integrate migrants into society.