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Eurogroup ready to agree new bailout program for Greece within short period — source

July 07, 2015, 20:59 UTC+3 BRUSSELS

The new aid program should be implemented only on condition that Athens confirms its obligations to international creditors, the source says

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© AP Photo/Daniel Ochoa de Olza

BRUSSELS, July 7. /TASS/. The Eurogroup of eurozone finance ministers is prepared to agree a new loan program for debt-stricken Greece within a short period on condition that Athens honors all of its obligations to creditors, a European source said after a Eurogroup meeting on Tuesday.

"The Eurogroup is ready to quickly solve the key issue of offering Greece a new program of aid in the form of a preferential credit line from the European Stabilization Mechanism. We are waiting for an official request for this from the country’s government within the next few hours," the source said.

The new aid program should be implemented only on condition that "Athens confirms its obligations to international creditors," the source said.

At the same time, Greece should move along the path of structural reforms to make this confirmation valid and ensure a budget surplus [for further debt repayment]," the European source said.

A decision on the possibility of the Greek debt restructuring can be made and endorsed only "at the level of the heads of state," he added.

"This issue can be discussed, of course, but only in the event of obviously positive dynamics in the negotiations in all the other areas," the source said.

Meanwhile, the Eurogroup’s meeting on Tuesday yielded no results. Athens has not yet submitted its proposals on overcoming the sovereign debt crisis, reforms or an official request for a new bailout program.

Referendum in Greece

Greeks went to the polling stations on Sunday to decide whether the Greek government should accept or reject a draft agreement on a new austerity package for debt-laden Greece worked out by the European Commission, the European Central Bank and the International Monetary Fund. Greek Prime Minister Alexis Tsipras urged Greeks to say 'no' to the creditors' ultimatum at the referendum.

The referendum results showed that most Greeks (61%) voted against the creditor terms.

Since 2010, when Greece’s sovereign debt crisis broke out, Athens has received 240 billion euros in bailout loans from the EU and the International Monetary Fund (IMF).

Despite a partial debt write-off in 2012, Greece’s sovereign debt currently exceeds 315 billion euros or 175% of its GDP. This figure is almost three times the debt-to-GDP ratio set for the eurozone countries, which should not exceed 60% of GDO according to the EU’s Stability and Growth Pact.

Greece’s international creditors say the Hellenic Republic can receive further financial aid, if the government undertakes to implement further austerity measures in the country.

Tsipras said earlier the international creditors should write off 30% of Greece’s debt.

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