The Strategist

Greece to Loosen Capital Controls in the First Months of 2016

12/07/2015 - 16:57

Greece plans to ease the country's current capital controls in the early months of 2016, said Deputy Prime Minister Yannis Dragasakis, speaking in parliament.

He said that the country's international lenders will have verification of the Greece crisis program completed at the beginning of 2016.

According to Dragasakis, negotiations on the restructuring of Greek debt will begin after that.

Greece has introduced a strict control over the movement of funds on June 29, 2015, when it was forced to suspend banks. The measure was intended to stop leak of deposits and flight of money from the country during the negotiations over the new aid program with the lenders.

Later, some restrictions have been canceled.

The volume of the third aid package, agreed by Greece with its creditors, is 86 billion euros.

December 6, the Greek Parliament approved the budget-2016 in a cliff-hanging vote, which provides implementation of new austerity measures with a deficit of 2% of GDP.

The Greek government, according to the budget, expects to return to the international debt market in the second half of 2016.

The primary budget surplus is expected to reach 0.5% of GDP as stipulated in the agreement with the creditors. With this purpose, the costs should be reduced by 5 billion euros and revenues of the budget - increased.

153 MPs out of 300 supported the budget.

In 2015, economic growth in Greece is expected to be zero in the primary budget deficit of 0.2%. Greece's national debt is 180% of GDP, or 316.5 billion euros.

In mid-December, the creditors mission should assess Athens’ implementation of the agreement on financial assistance to make a decision on allocation of the next portion of the loan proceeds.


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