Greece optimistic of deal with lenders, unsettled by German Grexit remarks

Thu Feb 9, 2017 3:01pm EST
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By Jan Strupczewski

BRUSSELS (Reuters) - Greece is optimistic its international lenders will next week approve reforms required under its bailout, a minister said on Thursday, but criticized Germany for appearing to say the country might have to quit the euro zone.

Without euro zone finance ministers, who meet on Feb. 20, signing off on the completion of agreed reforms, there can be no further disbursements of loans and Greece would run out of money to service its debt in July.

Getting an agreement after Feb. 20 would be more difficult due to elections in the Netherlands, France and Germany between March and September.

Reflecting market concerns, 2-year Greek bond yields rose on Thursday to around 10.09 percent GR2YT=RR, their highest level since June last year.

"I am optimistic that we could have such an agreement before the Eurogroup on Feb. 20," Greek Alternative Foreign Minister for EU affairs George Katrougalos told reporters in Brussels.

"We want the package of the political agreement to have also the necessary measures for debt to be considered sustainable. The package must have both of these dimensions," he said.

The sustainability of Greek debt, now at around 180 percent of GDP, is crucial for the International Monetary Fund to join the latest Greek bailout, now shouldered only by the euro zone.

The IMF has been pressing euro zone governments to grant Athens substantial debt relief through lengthening and reprofiling loan maturities and grace periods.   Continued...

A Greek national flag flutters as the moon rises in Athens, Greece February 9, 2017. REUTERS/Alkis Konstantinidis