Greece

Greece’s Prime Minister Alexis Tsipras said the country won't be able to reach its primary surplus budget target after its current bailout program expires in 2018 and called on the creditors to renegotiate for lower goals, The Wall Street Journal reported. “We guarantee that we are going to reach the [3.5% primary] surplus, even if we have to use the fiscal brake, but only once in 2018,” Mr. Tsipras said late Wednesday during a briefing to journalists on the plane while traveling from China to Athens.

The three top executives at Greece’s bank rescue fund resigned on Wednesday as the country’s Syriza-led government buckled under pressure from the international creditors eager to accelerate a clean-up of the financial sector, the Financial Times reported. Aris Xenofos, chief executive of the Hellenic Financial Stability Fund, his deputy, Giorgos Koutsos, and a third team member, Anastasios Gagalis, were appointed less than a year ago by the leftwing Syriza-led government.

The European Central Bank said Wednesday it would start accepting junk-rated Greek government debt as collateral for the ECB’s regular lending to banks, reopening a cheap funding channel that could help breathe life into Greece’s struggling economy, The Wall Street Journal reported. The decision to open a funding facility that had been shut for 16 months should help to restore confidence in the Greek banking sector and could lead to the partial lifting of capital controls in the coming days, economists and bankers said.

Greece’s central bank has warned that new taxes introduced by the leftwing Syriza government in return for more bailout aid could derail the country’s chances of ending a seven-year-long economic contraction amid rising discontent with government policies, the Financial Times reported. The central bank warned on Wednesday that “the greatest risk [to future growth] relates to an excessive emphasis on tax increases” introduced as part of a €5.4bn austerity package approved by parliament last month.

Greece’s central bank governor has urged the country’s creditors to rework a core element of Athens’ new bailout, saying ambitious budget surplus targets agreed with the leftwing Syriza government are “unrealistic and socially unattainable.” Yannis Stournaras called for “a new deal” that would reduce the fiscal surplus, before debt payments, Athens must achieve — from 3.5 per cent to 2 per cent of national output — beginning in 2018.

Is there a path towards making Greece a successful self-financing economy within the eurozone? What would be required to put it on that path? These are the big questions about the economic plight of Greece and its ghastly relations with its partners, the Financial Times reported. Neither has much to do with what is going on, which is “extend and pretend”: the eurozone pretends Greece is not in default; Greece pretends it will reform; and both play for time. What would an honest reckoning look like?

From street protests and collapsing governments to eleventh-hour deals and financial lifelines, Greece has gotten used to lurching from crisis to crisis during its endless economic meltdown, Bloomberg News reported. Prime Minister Alexis Tsipras is relying on it being different this time after finance ministers in the euro region agreed to disburse more funds and the European Central Bank on Thursday said it would be willing to let banks increase their access to its cheaper credit.

The International Monetary Fund stepped back from confrontation on Greece this week — to the delight of eurozone policy-makers above all in Berlin, the Financial Times reported. After months of squaring up against Germany over the fund’s insistence on upfront measures to ease Greece’s enormous debt burden, the IMF signed off on yet another compromise that delays the day of reckoning and left any commitment on debt restructuring implicit at best.

A truce between Greece’s creditors averts an immediate panic over Greek bankruptcy this summer, yet as officials and onlookers digested the deal, it became apparent that less was agreed than meets the eye, The Wall Street Journal reported. The deal, struck in the small hours of Wednesday morning at the Eurogroup meeting of eurozone finance ministers in Brussels, broke an impasse between Germany and the International Monetary Fund that was holding up Greece’s bailout funding for this summer.

Eurozone finance ministers and the International Monetary Fund tried again to resolve a standoff over Greece’s bailout—including how to reduce the country’s mountain of debt—which has held up new aid payments for the country, The Wall Street Journal reported.