Greece gets 8.5 bln euros, plus promise of future debt relief

Jay Anderson
June 19, 2017

Greek Prime Minister Alexis Tsipras has welcomed a decision by the country's worldwide lenders to approve the disbursement of 8.5 billion euros in bailout loans and to detail medium-term debt relief measures following talks in Luxembourg.

Ahead of today's meeting, Ms Lagarde has again signalled that the International Monetary Fund won't provide any money to Greece until the eurozone is clear over debt relief that will be offered to Athens.

"We are really doing our best to find an agreement", said French Finance Minister Bruno Le Maire after talks on Monday with his Greek counterpart Euclid Tsakalotos.

However, Jeroen Dijsselbloem said the scale of the debt relief offered to Athens won't emerge at Thursday's meeting of the eurozone's 19 finance ministers.

The IMF has so far refused to join in this bailout, Greece's third since 2010, because it believes that without relief Greece can not get out from under its massive debt mountain.

He says this is a major step forward, as there is agreement on all elements of the latest bailout.

They anticipate that Greece will likely receive "unanimous praise" for its reform efforts and get a quick disbursement of cash but that the issue of debt relief will "remain ongoing".

The IMF wants clarity on longer-term debt relief for Greece once the current funding scheme, worth up to €86bn, runs out next year.

The IMF contribution to Greek bailout coffers is expected to be limited, but European governments see the IMF as a tough broker that will push Athens for reforms and lend the country's bailout electoral credibility.

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Greece's global lenders prepared on Thursday to unblock as much as 8.5 billion euros (7.44 billion pounds) in loans that Athens desperately needs next month to pay its bills, and to give some idea of what debt relief they may offer over the long-term.

Moscovici expressed his hope that the "spirit" was there for Greece's relations with its creditors to move to a "new phase".

Euro zone ministers struck a long delayed bailout deal with Greece on Thursday (June 15) to unlock badly needed rescue cash, but warned Athens would have to wait for debt relief.

"On Thursday, we will manage to achieve that", German Finance Minister Wolfgang Schaeuble, the eurozone's most influential official, told Bloomberg news agency.

The Eurogroup has welcomed reforms adopted by Greece's parliament - covering areas such as pensions, income tax, the labour market as well as the financial and energy sectors.

Paris has proposed a mechanism of flexibility to lessen Greek debt repayment based on its economic growth.

Though the meeting won't see any final decisions on the size of the debt relief, Dijsselbloem said discussions will center on what kind of measures will be offered.

The Greek government, whose popularity has fallen sharply as it imposed more austerity measures, faced more criticism on Thursday when more than 2,000 older protesters marched through Athens to demonstrate against pension cuts.

"We can't live on 300 euros ($334)!" they chanted, with some waving sticks.

Other reports by BadHub

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