The Eurogroup unlocks 8,500 million of the rescue for Greece

The Eurogroup unlocks 8,500 million of the rescue for Greece

  • This closes the second revision of the Greek rescue, stagnating for 8 months.
  • Greece will be able to meet the 7,400 million disbursement it faces in July.

The ministers of Economy and Finance of the Eurozone, the Eurogroup, reached an agreement on Thursday that gives the green light to the disbursement for Greece of a new tranche of aid of 8,500 million euros of its rescue, Efe told European sources.

Athens, its European creditors – European Commission, European Central Bank and European Stability Mechanism – and the International Monetary Fund put in place during the meeting held in Luxembourg the blockade to close the second review of the Greek rescue, stagnating for about eight months.

This amount will allow the country to meet the disbursement of 7,400 million euros that faces in July, an amount of which 5,600 million will go to debt maturities and the rest for late payments.

"I am pleased to announce that we have reached an agreement on all the key elements: conditionality, debt strategy for the future and the participation of the IMF," said the president of the Eurogroup, Jeroen Dijsselbloem, at a press conference at the end of the meeting.

Relief measures

 Relief measures

The also acting Dutch finance minister explained that the institutions have validated the implementation of the measures required of Athens and have specified more the medium-term debt relief measures that they agreed to grant to Greece at the end of their rescue program, such as asked the IMF.

"As a result of the agreement, I will propose to the executive board of the IMF that it approve in principle a new prudential agreement to support Greece," said the managing director of this institution, Christine Lagarde, who participated in the meeting.

The agreement could make 2,000 million dollars available to the country , said Lagarde, who added that he will begin the process for the Fund to approve this agreement in the next 24 hours and hopes to complete the process before July 27.

However, this agreement in principle assumes that the Fund conditions its participation to give even more clarity on debt relief measures so that the institution knows exactly what will be the amount of relief of the cargo granted to Greece at the end of the year. of the program and can evaluate the sustainability of long-term debt, up to 2060.

"There has been clear progress but the IMF believes that more needs to be done and that partners clearly need more time to complete the process of identifying debt measures, " Lagarde said , adding that he expects this identification process to conclude "soon" .

Extend maturities

 Extend maturities

For the moment, the Eurogroup ensures that it is willing to extend the average maturities of the loans to Greece, as well as to extend the extension of interest payments for up to 15 years, as well as to implement a program that links the rhythm of the return of loans to the country's growth.

If there is more growth, then the repayments of the loans can be made quickly. "If there is more growth, then the repayments of the loans can be made quickly, if it is slower, more extensions could be implemented for the interests," said Dijsselbloem.

The Dutchman said, however, that it will not be until the end of the bailout when this program is implemented and the need to restructure the Greek debt is gauged.

Lagarde admitted that "nobody thinks this is the best solution," but stressed that the agreement "has avoided a financial crisis."

The Commissioner of Economic Affairs, Pierre Moscovici, considered that the agreement "is more than deserved", and highlighted the "unprecedented effort" of the Greek Government to meet the conditions.

As for the next steps, Greece will receive a first payment of 7.7 billion euros in July, once those countries that need to validate the agreement in their national parliaments have received the nod, and a second of 800 million euros after the summer.

This should allow him to fulfill his obligations in the coming months, according to the institutions.

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