June 9, 2017 / 10:20 AM / 5 months ago

Greece approves reforms in return for loans, debt relief

ATHENS (Reuters) - Greece’s parliament approved on Friday reforms demanded by the country’s international lenders to conclude a long-stalled review of its bailout progress and qualify for more loans needed to repay debt maturing in July.

A man looks down as a Greek national flag flutters atop one of the bastions of the 17th century fortress of Palamidi under an overcast sky at the southern port city of Nafplio, Greece, February 19. 2017. REUTERS/Alkis Konstantinidis

Euro zone finance ministers meet in Luxembourg on June 15 to discuss Greece’s reform progress and measures to reduce its debt, which stands at about 180 percent of GDP after seven years of crisis.

“It’s clear that Greece has fulfilled its promises and met its obligations. It has already done more than it was supposed to ... and it’s now the lenders and our partners’ turn to meet their commitments,” Labour Minister Effie Achtsioglou told lawmakers before the vote.

The legislation passed after all 153 deputies in the ruling coalition voted in favor in the 300-seat parliament, with 84 opposed to the bill. A total of 237 deputies voted.

Following the vote, euro zone finance ministers are expected to approve a new loan tranche at the June 15 meeting. Athens needs the funds to repay about 7.5 billion euros in bonds and loans maturing in mid-July.

Achtsioglou said the country’s lenders also had the “legal and moral obligation” to ease Greece’s debt mountain.

On May 22, the euro zone and International Monetary Fund failed to reach an agreement on the size of debt relief and the mix of measures the country will implement after its bailout expires in 2018, to make its debt sustainable, mainly because of differing growth assumptions.

Athens rejected a draft Eurogroup statement that night, saying it did not offer enough clarity to guarantee a recovery.

A meeting of euro zone representatives on Thursday did not achieve much progress, leaving key issues in the hands of finance ministers next week, two EU officials told Reuters.

Prime Minister Alexis Tsipras’s government seeks a return to bond markets as early as this summer. It hopes that debt relief will help convince the European Central Bank to include the country’s bonds in its asset-buying program, a move that would help restore investor confidence.

Since 2010, Greece has signed up to three rescue packages in exchange for deep pension cuts and tax hikes that plunged the economy into recession, putting thousands out of work. Tsipras’s popularity is dropping and his term ends in 2019.

The so-called prior actions, which include labor and pension reforms, were submitted to parliament as amendments to a bill approving a U.N. fisheries commission measure to protect living marine resources in the Mediterranean.

Dozens of leftist protesters, rallying outside parliament against austerity, hurled fish at police guarding the entrance.

During the debate on Friday, Finance Minister Euclid Tsakalotos said that along with a clear solution on debt, Athens was also seeking funds to boost growth.

One way to help make the country’s debt sustainable is to increase its gross domestic product, he said.

“We are fighting for more guarantees regarding our growth strategy and its funding,” Tsakalotos said.

Additional reporting by George Georgiopoulos, Angeliki Koutantou in Athens and Francesco Guarascio in Brussels,; Editing by Tom Heneghan and Toby Davis

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