Greece’s latest tranche of bailout cash has been agreed by 19 eurozone ministers meeting in Luxembourg. It includes steps to foster Greek growth and a stand-by promise from the International Monetary Fund.
Multiple news agencies said the tranche would amount to 8.5 billion euros ($9.5 billion). It included a proposed International Monetary Fund (IMF) buffer, exceeding the 7 billion euros Athens needs to repay in July in order to avoid insolvency.
The new loan disbursement had hinged on a condition set by the German parliament that the IMF joined the Greek bailout. The IMF, in turn, had demanded details on what relief was also envisaged for 2018.
Schäuble ‘confident’ of Greece securing funds
“I am glad to announce that we have achieved an agreement on all the elements – conditionality, the debt strategy moving forward, and International Monetary Fund participation,” Dijsselbloem said.
“We’re now going into the last year of the financial support program for Greece – we will prepare a financial exit strategy going forward to enable Greece to stand on its own feet again over the course of the next year,” he said.
Some debt repayments could be delayed by 15 years. In addition, Greece’s growth levels could be taken into account in its repayments, he added.
Future participation by IMF
“I would like to announce my intention to propose to the IMF’s Executive Board the approval in principle of a new International Monetary Fund stand-by arrangement (program) for Greece,” IMF head Christine Lagarde announced.
Earlier on Thursday, Dijsselbloem had told reporters that lenders, including the International Monetary Fund (IMF), were agreed that Greece had pushed through requested reforms.
Reluctance in election-year Germany
Arriving in Luxembourg Thursday, German Finance Minister Wolfgang Schäuble had said: “I am confident that we will reach a deal about the payment of the next tranche today.”
He later told German public ARD television that the inclusion of the IMF as a lender – a condition set by the German parliament – would result in the international lender paying out but only later.
“Our understanding is that this is not a fundamental change to the program,” Schaeuble said. “In the end it is for the budget committee to decide.”
Debt relief had been a hard sell in Germany, the biggest contributor, which faces a federal election in September.
Meltdown seven years ago
It will be the third bailout for Greece since it entered a financial meltdown seven years ago; the IMF had underpinned the first two loan packages.
The reforms sought by lenders, including further Greek pension cuts and tax hikes, had placed mounting pressure on Greek Prime Minister Alexix Tsipras, who has faced resistance from an electorate weary of the austerity measures that Tsipras’ Syriza party had pledged to end.
Source: Deutsche Welle