New financial turmoil surrounding Greece are initially banned: The euro countries gave in Tuesday night ahead for the disbursement of a further 10, EUR 3 billion from the current utility. To get even the International Monetary Fund (IMF) on board, they said Athens significant debt relief to – though until 2018. Whether the IMF actually involved, but still seems open
German Finance Minister Wolfgang Schäuble (CDU) spoke after eleven hours of negotiations in Brussels a “good result” in a difficult situation. He suggested that the IMF funding goes into the utility. It should also be “excluded any liquidity crisis in Greece for the next months” by the new tranche of aid.
Greek Finance Euclid Tsakalotos saw an “important moment”. After some “tense” negotiations Greece had by the debt relief the contemplated now the opportunity to escape “vicious circle” of recession and austerity measures.
A first auxiliary tranche of 7.5 billion euros to Athens after the Euro group decision received “in June,” the rest “after the summer”. Prior to the first disbursement Greece still needs to make improvements in some reforms, but this is not problematic. Schäuble said that since there were no significant changes to the utility, a resolution of the Bundestag before the payment was not necessary. It is sufficient if the Budget Committee dealing with it.
part of the resources, the cash-strapped Greek government committed to pay arrears in Greece itself, as compared to companies with state contracts. The aim is to give as well as the economic momentum. Athens estimates the amount to 3.5 billion euros. The rest of the money is earmarked for repayments to international creditors.
The euro countries had with Greece last summer, a third aid package of up to 86 billion euros agreed. The IMF requires the participation of significant debt relief dependent. Against these Schäuble had resisted long, but also wanted to get the IMF on board.
The IMF experts to participate in the aid program now would recommend said Euro group chief Jeroen Dijsselbloem at night. By the end then the governing body of the Fund will decide after this have a new analysis created for debt sustainability.
“We welcome the fact that now all stakeholders recognize that the Greek debt unsustainable, “said IMF Europe Director Poul Thomsen in Brussels. Later, a senior IMF official stepped in Washington against the impression that the fund was already satisfied with the commitments of the euro countries to debt relief. “Reasonable assurance” for it are yet necessary, he said. And the measures should be quantified. He hopes that will do so until the end.
While the euro group called concrete short-, medium- and long-term measures for possible multibillion dollar debt relief. They include about the sharing of profits of the European Central Bank with Greek government bonds as well as the use of unused billion to recapitalize banks to reschedule loans in low-interest loans in the euro bailout fund ESM.
Nothing is decided but so far concrete. This should happen mid-2018 until the end of the utility. Only the rescue fund ESM will almost instantaneously through better debt management try to lower the interest burden for Athens in the long run.
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