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Greece Begins Talks For Third Bailout Of €85bn

Greece Begins Talks For Third Bailout Of €85bn

Greece has begun negotiations to secure a third bailout worth €85bn (£60bn) from creditors - even though the International Monetary Fund has warned it will be unable to help until key economic reforms are made.

The talks are being held in Athens, and Finance Minister Euclid Tsakalotos has three weeks to reach a deal with the European Commission, the European Central Bank and the European Stability Mechanism.

The IMF is also in attendance, but has warned that Greece’s debt burden could become unsustainable in the next two years, reaching 200% of the country’s economic output.

If an agreement is not made by 20 August, Greece will miss a crucial debt repayment to the ECB, which is worth €3bn (£2.12bn).

Any bailout deal will likely include painful austerity measures and although Prime Minister Alexis Tsipras has said he disagrees with the cuts, he has vowed to implement them.

In the early hours of Friday, Mr Tsipras managed to fend off attacks from anti-euro rebels in his own party, who were pushing for a return to the drachma and an end to the bailout talks.

One dissenter, Panagiotis Lafazanis, said: "This country no longer has democracy, but a peculiar type of totalitarianism - a dictatorship of the euro."

As the talks got under way in a central Athens hotel, Mr Tsipras was in parliament answering questions from opposition ministers, following reports that his government made secret contingency plans in the event Greece was forced out of the euro.

He said: "We didn’t design or have a plan to pull the country out of the euro, but we did have emergency plans.

"If our partners and lenders had prepared a Grexit plan, shouldn’t we as a government have prepared our defence?"

Mr Tsipras also defended his former finance minister Yanis Varoufakis, who has caused outrage in Greece after disclosing plans to hack into citizens’ tax codes and create a parallel payment system.

He said: "Mr Varoufakis might have made mistakes, as all of us have … You can blame him as much as you want for his political plan, his statements, for his taste in shirts, for vacations in Aegina.

"But you cannot accuse him of stealing the money of Greek people or having a covert plan to take Greece to the precipice."