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8 maltatoday, WEDNESDAY, 12 AUGUST 2015 News Greece agrees new €86 billion bailout deal Athens reaches an agreement "in principle" with lenders for new bailout, but economists warn fiscal targets are "utterly unachievable" THE Greek government and the European Commission yesterday said an ambitious €86 billion bail- out deal had been agreed between Athens and its creditors. The three-year deal, which must now be agreed by eurozone political leaders, including Ger- man chancellor Angela Merkel, was reached in return for radical economic reforms to be pushed through parliament as early as this week. After negotiations that lasted through the night, Greek negotia- tors claimed that an outline deal was reached on Tuesday morning with only "two or three issues" left unresolved. The European Commission confirmed that a "technical deal" was in place, underlining that there must now be "political agreement" and "there are some small details that need to be fi- nalized". In return for an expected €86 billion package of loans to meet payments over the coming three years, Greece agreed to achieve a 'primary' budget surplus before debt repayments of 0.5 per cent in 2016, rising to 1.75% in 2017 and 3.5% in 2018. Greek centre-right newspaper Kathimerini said it understood the deal involves no fewer than 35 "prior actions", or reforms demanded by creditors. These include a review of the welfare system, phasing out early retire- ment, scrapping tax breaks for islands by the end of 2016, de- regulating the energy market and proceeding with a privatisation programme already in place. One of the issues which has not yet been resolved is how the pro- ceeds from the €50 billion worth of privatisations will be man- aged. The leftist government of Prime Minister Alexis Tsipras, which has reversed its anti-austerity policies since capitulating to eu- rozone leaders following a sum- mit in Brussels last month, hopes to push a raft of reforms through parliament on Thursday, paving the way for eurozone finance min- isters to bless the deal and unlock rescue funds by 20 August, when Athens has to pay €3.2 billion to the European Central Bank. Tsipras could be pushing for a speedy agreement to secure his political future, with his popular- ity likely to wane the longer the situation remains unresolved and capital controls remain in place. Tsipras drove through the re- forms demanded by the lenders only thanks to the support of opposition parties and a quick deal could encourage the embat- tled Prime Minister to call early elections to rid himself of far-left rebels in his Syriza movement who reject the rescue terms and would prefer a Grexit. But whether Berlin accedes to Tsipras' game plan is another question, with Merkel's gov- ernment insisting that the deal should not be rushed through and indicating that it would rather drag the negotiations out while granting Athens €5 billion in bridging finance to meet the 20 August payment. Economists say targets are "unachievable" The deal was met with opti- mism in Brussels and European capitals but the consensus was not shared by economists at Capital Economics who said "the plan rests on initial forecasts for the economy and public finances which are little short of fantasy." The analysts warned that there is a clear danger that the bail- out will unravel long before its planned three-year expiry date. "In short, we maintain the view that a third bailout for Greece will not solve its deep-seated economic and fiscal problems or secure its future inside the cur- rency union." They said that recent data sug- gests that the economic impact of capital controls in Greece has been catastrophic, adding that GDP could still fall much more sharply this year than the pre- dicted 2.1% - 2.3%. "We expect a contraction of about 4% or worse. And lasting damage to Greece's economy and financial system, as well as its fundamental lack of competi- tiveness, could prolong the slump into next year and beyond," the analysts said. This, they said, suggests that even the amended fiscal targets will prove "extremely demanding, if not utterly unachievable." "Indeed, the downturn in the economy looks likely to push the primary budget sharply back into deficit in the coming quarters. That would leave the surplus tar- gets requiring considerable extra austerity, with corresponding further damage on the economy," the economists said. Friends again? Greek Prime Minister Alexis Tsipras, Italian Prime Minister Matteo Renzi (centre) and German Chancellor Angela Merkel at an EU summit in Brussels on June 25, 2015 Malta nets €74 million to deal with migration MALTA will be receiving €74 mil- lion as the European Commission freed up €2.4 billion to help member states deal with migration. The money, to be handed out over several years, is part of the EU's 2014- 2020 budget. It will be funneled to 23 national programmes, including the frontline countries most heav- ily exposed to migration, including Malta, Italy, Greece and Hungary. Italy will be receiving €557 million while Greece will receive €473 mil- lion through the Asylum, Migration and Integration Fund (AMIF) and the Internal Security Fund (ISF). Pointing out that EU funds will be released urgently, the European Commission said 22 national pro- grammes were already approved in March, and an additional 13 pro- grammes will be approved later this year. The European Commissioner re- sponsible for migration, Dimitris Avramopoulos, said member states are facing unprecedented challenges in terms of migration and security and pointed out that the Commis- sion is taking action in a spirit of solidarity. Stressing that the EU is "deter- mined to continue to put solidarity into practice," Avramopoulos said "the Commission is taking bold steps to improve migration manage- ment, foster cooperation and make Europe safer from organised crime and terrorism for our citizens." Missing from the funding list pub- lished by the commission were the UK and France, which have been in the spotlight recently as thousands of migrants block the underground English Channel tunnel in an at- tempt to reach Britain. In March, the British government received €392 million while France got €463 million in EU funding as part of an earlier programme. Part of the funding will go to im- prove reception capacities, ensure that asylum procedures meet EU standards, the integration of mi- grants at local and regional levels and improve return programmes. Other funds will be directed toward improving border control and sur- veillance, and for cross-border law enforcement cooperation. The fence on the Bulgarian border with Turkey, erected in 2014 to stem the flow of Syrian migrants