EU green-lights new bailout loans for debt-stricken Greece
BRUSSELS – Finance ministers from the nations using the euro single currency gave their green light Monday for new loans to Greece to help bolster its debt-stricken economy.
At talks in Luxembourg, the ministers agreed that the leftist government in Athens has met enough reform conditions to qualify for another 2.8-billion-euro ($3.1-billion) tranche of bailout funds. The so-called milestones met by Greece included politically sensitive sectors like pensions, privatization, energy and bank governance.
Eurogroup President Jeroen Dijsselbloem said an initial slice of 1.1 billion euros will be provided and that the other 1.7 billion euros is likely to be agreed for handover at the end of October once important arrears data has been collected.
“It’s not a matter of negotiations or political talks,” Dijsselbloem told reporters after the meeting. “It simply takes time” to collect this data. “The money will come. Don’t worry.”
International creditors agreed last year to give Greece an 86-billion-euro package of rescue loans – Greece’s third bailout since 2010. But the review of how effective Athens has been in making required austerity measures was supposed to have been completed late last year.
With this first review being wrapped up, future meetings between Greece and its creditors will focus on a second review, this time not of the reforms needed but of the way those promised are being put into action.
Greece’s debt stands at about 180 percent of Gross Domestic Product and the International Monetary Fund has been arguing that the primary surplus targets set by Athens’ creditors to secure the massive rescue loans will prove too tough to respect. It remains unclear whether the IMF will take part in future loans without some form of debt reduction, something the 19-nation eurogroup is reluctant to discuss, given the many billions already spent on keeping the country afloat.
However ministers were upbeat Monday about Greece’s economy and the progress it has made on reforms, many of them deeply unpopular among long-suffering Greek citizens.
“Greece is making a lot of efforts. We have to recognize those efforts,” said French Finance Minister Michel Sapin.
EU Economy Commissioner Pierre Moscovici, whose services concluded that Athens has met its obligations on the milestones, said “we must absolutely go on to try to build a success story with Greece now. Greece is on the right path.”