“Small concessions are feasible provided they are strictly made within the framework of the second aid program,” the official told Bloomberg. “For instance, the interest and maturity on loans could be adjusted, as in the case of the first aid package”.
BBH analysts comment: “Despite posturing from both sides, neither Germany nor Greece will risk a Greek exit. We believe a compromise will be seen that allows Greece to get its next tranche of aid. Separately, senior CDU official Meister said Germany won’t approve any new money for Greece, but existing aid could be brought forward. Closure on Greece remains elusive, but risks of imminent default appear to be easing.”
Nevertheless, it is not expected that Germany agrees to a 2-year extension of the aid program, for which Greek PM Antonis Samaras will call during his upcoming meetings with French President Francois Hollande and German Chancellor Angela Merkel and on 23 and 24 August.
It was also reported on Tuesday that the package of budget cuts prepared by Greek Finance Minister Yannis Stournaras will amount to 13.5 billion euros, instead of the 11.5 billion required initially by the Troika. The austerity program is supposed to be definitively agreed upon by September 14.