The FT’s Kevin Hope is reporting that the Greek agreement with the troika has finally been concluded, and that the details of that agreement will be announced shortly.From the report:
An official in the prime minister’s office says: “There’s an agreement, Mr Papademos has met with Mr Samaras and it’s done. There will be a statement shortly.”
Troika officials have been demanding steep austerity measures as a prerequisite to the disbursement of the newest Greek bailout funds. Among those demands were massive private sector wage cuts, a steep drop in minimum wage, public sector layoffs, and policy changes that would curtail pension plans.
Greek politicians had resisted that decision, fearing those cuts would bite into an already contracting economy and escalate social pressures. One of the most vehement members of that opposition was New Democracy leader Antonis Samaras.
Futures are now positive in the U.S. and the euro is rallying against the dollar.
Even if this report is true, however, Greece still needs to reach a deal with its private sector creditors on a bond swap plan that would restructure the country’s debt burden. Although such a plan has been discussed for months, creditors and Greek officials have had trouble seeing eye to eye so far.
UPDATE: It’s looking more and more like a deal has indeed been reached. The WSJ is reporting that a spokesman for the prime minister’s office has told them that the agreement has been finalised, and that the details will be released shortly.
UPDATE II: In a press conference discussing the European Central Bank’s latest monetary policy decision, President Mario Draghi confirmed that a Greek deal on austerity measures with the troika had indeed been reached. He said that Greek PM Lucas Papademos called him to report the news just moments ago.
UPDATE III: Well, don’t get too excited about this plan. Dow Jones reports that Irish Finance Minister Michael Noonan has said that he’s not sure if the deal is actually done yet, adding that he sees “gaps in [the] logic” of reports on the Greek political deal.
We’re not sure what this means for the agreement, since one would generally expect Draghi to be well-informed here.
What’s more, the Greek Deputy labour Minister has decided to resign from his post in protest of the new austerity measures, according to Bloomberg.
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