At a meeting in Brussels, Eurogroup finance ministers have given the go-ahead for the second tranche of loans to be paid out to Greece. The first disbursement will be completed in June. Athens will see a total of 10.3 billion euros disbursed. Federal Minister for Economic Affairs praised the outcome of negotiations.
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Total assistance of 10.3 billion euros is to go to Greece, decided the 19 Eurogroup ministers of finance after protracted negotiations in Brussels. A sum of 7.5 billion is to be disbursed in June, with the rest to follow later announced Eurogroup President Jeroen Dijsselbloem following the meeting.
European partners and creditors agreed that Athens is now on track and that it has made real efforts to push ahead with reform and austerity measures. Jeroen Dijsselbloem said that this was "very good news" and showed that the programme is fully back on track.
At the weekend the Greek parliament implemented further reforms and austerity measures demanded by creditors, including raising taxes, establishing a privatisation fund and implementing a debt brake.
Federal Minister for Economic Affairs and Vice-Chancellor Sigmar Gabriel has said this is a "very good outcome". "Everybody is relieved that last night an agreement was reached on Greece within the Eurogroup," he said at a joint press conference with Chancellor Angela Merkel following a Cabinet meeting in Meseberg.
Greece is already under a lot of pressure. The slow economic growth that has been achieved must not be extinguished again, said Sigmar Gabriel. The Vice-Chancellor also thanked Federal Finance Minister Wolfgang Schäuble for the outcome of the Eurogroup deliberations.
The International Monetary Fund (IMF) has signalled its readiness to uphold its involvement in the Greek assistance programmes. It had previously called for substantial debt relief. This will only be granted, however, once the programme is successfully wound up in 2018.
Until then the Eurogroup is to alleviate the burden of Greece’s debt to some extent. The repayment terms for loans are to be modified in the short term. If the programme is implemented in full, the Eurogroup is to disburse profits to Greece in the medium term. These are profits which the European Central Bank has made in trading Greek government bonds. The government in Athens is also to benefit from around 20 billion euros which was reserved for the recapitalisation of Greek banks but was not required.
The latest consultations are part of the third assistance programme for Greece. Eurogroup ministers of finance agreed on a third package of up to 86 billion euros in mid-2015. So far 21.4 billion euros have been disbursed.