Ending weeks of speculations over the bailout tranche it is now final that Greece will receive at least €7.5 billion of the €10 billion promised in the last review meeting. This will be the second injection of bailout money that was agreed between the Euro-zone governments and Greece’s Syriza party. A total package agreed in the bailout was worth €86 billion.
After the Euro group finance ministers agreed on the loan month’s back, it was thrown into doubts by the International Monetary Fund (IMF) who called for an explicit guarantee from the Euro-zone governments and Greece and the country’s debt burden will be tackled in such a way that it will follow a sustainable path. However, the deal has passed the hurdle and the board of the directors of the European Stability Mechanism approved its release. In the latest review, reforms taken up by the Greek government were recognized by the creditors and fund injection was agreed.
Klaus Regling, managing director of the ESM said, “ It has passed legislation that will: reform the pension and income tax systems; establish a new privatization and investment fund; enable the sale of non-performing loans; and introduce an automatic fiscal adjustment mechanism to be triggered in case fiscal targets are not met.”
Greece will use €3.5 billion of the cash to pay back the creditors, which will help the country to remain solvent for the rest of the year.
Greece is now very close in securing the waiver from European Central bank (ECB) that will enable the banks to access cheap funding from ECB.
The material has been provided by InstaForex Company – www.instaforex.com