Creditors get ready to open Greek bailout talks

Greek bailout talks: Greece and its creditors are getting ready to open talks to complete a bailout deal after Athens passed the required set of austerity measures, but the negotiations must still clear numerous hurdles before the country gets any aid. 
European officials welcomed the Greek Parliament’s adoption of a second batch of tough new measures yesterdays , which its creditors had demanded as a precondition to start talks on a rescue package of up to €86bn. Greek lawmakers approved the economic overhauls “in a timely and overall satisfactory matter,” a spokeswoman for the European Commission said, adding that negotiations “should now progress as swiftly as possible.”
Negotiators from the European Central Bank, the European Commission and the eurozone’s bailout fund are set to return to Athens over the next couple of days for a first meeting with Greek officials, according to a Greek finance ministry official. International Monetary Fund officials are also expected to head to Greece to take stock of the economy and examine state balance sheets, though the IMF staff can’t start bailout negotiations until the government officially asks for financing from the Washington-based fund.
There are growing doubts, however, whether the severely weakened Greek economy can support the program after a six year-long slump that has cut national output by a quarter and sent unemployment over 25 percent. In its quarterly report, the Athens-based Foundation for Economic & Industrial Research (IOBE) said capital controls imposed last month to save the financial system from a bank run would exact a heavy toll. Reversing a forecast for growth this year of 1 percent made as recently as April, it said the economy would contract by as much as 2.0-2.5 percent after growing 0.7 percent in 2014, and stay in recession next year.
The extent of the IMF’s future participation is also still unclear once its current program expires next year. The Washington-based institution says Greece’s huge public debt must be restructured if the bailout is to have any chance of success but it faces resistance from reluctant European partners.”Clearly it’s a difficult path ahead, we’re just at the beginning of the process,” said IMF spokesman Gerry Rice.

Source: wsj