Brussels, 09/07/2013 (Agence Europe) - On Monday 8 July, eurozone finance ministers reached agreement in principle on disbursement of the next batch of aid to Greece in several instalments as long as the country strictly complies with the criteria. Greece will receive a total of €6.8 billion by the autumn, €5.8 billion of it by September.
The €3 billion from the eurozone laid down in the aid programme timeline will be paid in two batches, €2.5 billion later this month, as long as all the prior actions have been implemented by Greece by 19 July and the national parliaments that have to endorse the aid have given the go-ahead. The Euro Working Group would then make recommendations to the European Financial Stability Fund (EFSF). The head of the Eurogroup, Jeroen Dijsselbloem, said that, before then, more work would be needed to ensure full implementation of the required measures, stressing reform of the Greek civil service and improving tax collection. A second sub-batch of aid, €500 million, from the EFSF would then be paid in October, as long as the required prior actions specified in the memorandum of understanding have been implemented.
The IMF board will examine the troika's report (European Commission, European Central Bank and International Monetary Fund) and is expected to give the go-ahead for payment of €1.8 billion. IMF Director General Christine Lagarde, said: “At the end of July, the IMF board will review the report that has been put together by the troika, prior action agreed and delivered upon, expect that board will give green light”.
Under the agreements reached in November 2012, the Eurosystem central banks (apart from those in receipt of financial aid) will pay back some of the profits made under the SMP programme. A payment of €1.5 billion will take place at the same time as the EFSF payment in July, and €500 million will be paid in October to a separate account used solely for debt repayments.
French Economy Minister Pierre Moscovici said that the efforts made by Greece meant that the country deserves confidence, but at the same time, being realistic, the necessary measures need to be taken. Welcoming the progress made, Euro Commissioner Olli Rehn said it was time to speed up the reform momentum in Greece because the recent political turbulence had led to delays in the programme. The Greek government pulled out all the stops to reach agreement with the troika in the nick of time on Sunday morning to prevent the freezing of aid instalments over the next three months.
The €8.2 billion that the Greek media have been reporting on for the past few weeks has not arisen and a European source, in fact, said that the sum was pure speculation. Reuters quotes a manager at the Greek Finance Ministry, who said this was the amount Greece had been hoping for, but it was pleased with the agreement reached on Monday evening. Pierre Moscovici quashed a rumour that the payment of a further €1.8 billion had been discussed. The Greek media says the €1.8 had, indeed, been discussed but Germany had rejected it. Greek Finance Minister Yannis Stournaras, upon arrival at the Eurogroup meeting, played this down pointing out that the financing needs for the last two months of 2013 were ”trivial.” In the second half of 2014, however, a change is expected because the IMF is expecting a payment gap of €4 billion. Dijsselbloem said: “For the foreseeable future, I don't see a financing gap,” adding that, if there were a gap, it would be at the end of 2014, so there would be “plenty of time to deal with it.” The IMF is expected to bring up the question well before then because under IMF rules, visibility is required for financing for the upcoming twelve months. Lagarde said: “The Europeans have made a serious financing commitment”, explaining that, at the IMF, “there is a rule for the next twelve months: apply this principle in the light of the commitment by Greece and its partners”. (EL/transl.fl)