Eurogroup agrees on aid for Athens

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Meeting of eurozone finance ministers Eurogroup agrees on aid for Athens

After the Greek parliament, the eurozone finance ministers have approved a third assistance programme. Federal Finance Minister Wolfgang Schäuble spoke of a "good day" and a "chance" for Greece.

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In a special meeting in Brussels the Eurogroup discussed the previously negotiated terms for the planned loans of up to 86 billion euros. Late Friday evening they then announced their agreement. The Greek parliament had already approved the reform requirements attached to the programme. 

Schäuble praises Greece's commitment to reform

It was "overall a good day," declared Federal Finance Minister Wolfgang Schäuble following the special meeting in Brussels. He said his approval was due to the change of course in Athens. The situation is "completely different" compared to what it was until July, he said, referring to the parliament’s decision in Athens.

This opportunity must be taken advantage of. "Of course, we must nonetheless remain cautious, because the sums which we are making available are significant", Schäuble admitted. He stressed that the implementation would be monitored "very closely, step by step", following the experience gained in recent years.

Before the start of the meeting Schäuble had called for participation of the International Monetary Fund in the aid package for Greece. "We must see if we have a clear commitment from the International Monetary Fund, if possible a binding IMF commitment", he said, adding that it was also important that the results of the July 12 summit be implemented.

On 12 July the heads of state and government of the euro countries had agreed with Greece on a third bailout. The Greek government submitted a corresponding request to the European Stability Mechanism (ESM). According to the rescue programme, the country would receive loans totalling between 82 and 86 billion euros over the next three years. The aid programme is associated with numerous and far-reaching reform requirements of the Greek state and economy. 

IMF participation fundamental

The head of the Eurogroup Jeroen Dijsselbloem also emphasised that the continued participation of the IMF was of fundamental importance for the Eurogroup. However, the participation of this institution depends on the implementation of reforms. The IMF must also be convinced of the sustainability of Greece’s debts.

EU Commission President Jean-Claude Juncker welcomed the agreement in Brussels, stressing that all sides had respected their commitments, and that Athens was living up to its reform commitments. "The message of today's eurogroup is loud and clear: on this basis, Greece is and will irreversibly remain a member of the euro area", he said. 

Bundestag yet to agree

Now that the eurozone finance ministers and the Greek parliament have given their approval, the German Bundestag and other European parliaments will have to vote on the 86-billion euro aid programme. The Bundestag is preparing for a special meeting early next week.

If the parliaments also accept the programme, Greece could settle some of its debts as soon as next Thursday with funds from the new package, notably 3.4 billion euros due to the European Central Bank (ECB) for maturing bonds and interests.

The basis of the decisions by the Greek parliament and the eurogroup meeting is the agreement in principle reached between Greece and its creditors. The ECB, the EU and the IMF had agreed earlier this week on a so-called Memorandum of Understanding (MoU). The MoU contains reform requirements for the next years and a number of "prior actions" that needed to be approved before new bailout money can start being disbursed.