World Economy

Eurozone Approves $9.7 Billion for Greece

Eurozone Approves $9.7 Billion for GreeceEurozone Approves $9.7 Billion for Greece

The eurozone approved the latest €8.5 billion ($9.7 billion) bailout disbursement to Greece, just in time for Athens to meet major debt repayments and avert default.

“The Board of Directors of the European Stability Mechanism today (Friday) approved the third tranche of €8.5 billion of ESM financial assistance to Greece,” the eurozone bailout fund said in a statement, MENAFN reported.

The 19 eurozone finance ministers struck a long-delayed cash-for-reforms deal with Greece last month to unlock the badly needed rescue funds but the payout was delayed by a legal snag. The deal was meant to avert a repeat of the summer of 2015 when Greece spectacularly defaulted on an IMF loan and allow Athens to meet €7 billion of debt repayments due in July.

But Spain last month threatened to block the disbursement, angry that Athens has failed to drop a legal case against European experts, including some of its officials, who had worked on the Greek privatization program.

Greece’s supreme court on Tuesday dismissed the case, opening the way for Friday’s payment. ESM Managing Director Klaus Regling said: “Today’s decision ... shows that Greece has completed the reforms required at this stage.”

“The government should continue on this path to rebuild a competitive economy and regain investors’ trust,” Regling said in the statement.

EU Economic Affairs Commissioner Pierre Moscovici, a former French finance and economy minister, said all parties had worked together to get to this “new positive stage”. “Greece’s partners recognize the unbelievable efforts made by the Greek people to stabilize the economy. This payment opens a new chapter for Greece whose key words must be jobs, investment and recovery for the benefit of all,” he said.

Greece’s third bailout since 2015 is set to run until 2018, with Athens hoping to win significant debt relief at the program’s conclusion.

In return for aid, successive governments have had to adopt stinging and hugely unpopular austerity measures in an effort to balance the public finances burdened by a mountain of debt.

The fund is expected pay out a total of €7.7 billion on Monday. Some €6.9 billion will help Greece to meet its debt repayment commitment, which amounts to around €7 billion this month, while €800 million will be used to clear arrears.

The second part, €800 million, will be paid in September if the Greek government has made “significant progress on arrears clearance” with its own funds, the ESM said in a statement.

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