EU Approves Tranche, Spotlights Reforms

ANA-MPA – tHE EFSF  issued the following Press release on Monday, announcing the disbursement of a 1 billion euros loan tranche to Greece:

“The Board of Directors of the European Financial Stability Facility (EFSF) approved on Monday the disbursement of 1 billion euros to Greece, taking into consideration the full implementation of a set of milestones agreed in April 2014.

This is the second tranche of the total 8.3 billion euros instalment approved by the Eurogroup following the conclusion of the fourth review mission of Greece’s macroeconomic adjustment programme. After the present disbursement, total EFSF financial assistance for Greece will reach 140.9 billion euros. One more tranche of 1 billion euros may be disbursed by the EFSF as part of this 8.3 billion euros instalment, conditional upon the implementation of a further set of milestones. After this is completed, 1.8 billion euros will remain available from the EFSF.

Klaus Regling, CEO of the EFSF said: ‘With the implementation of the milestones Greece continues to implement reforms necessary for the rebalancing of the economy.'”

Following the conclusion of the Eurogroup meeting, its president Jeroen Dijsselbloem expressed his satisfaction for the completion by Greece of the six prior actions required for the disbursement of the 1-billion-euro loan tranche.

According to Dijsselbloem, Finance Minister Gikas Hardouvelis reassured the Eurogroup that the Greek government will satisfy by the beginning of August all the remaining six prior actions required for a further 1-billion-euro loan tranche disbursement.

He also mentioned that the technical mission of Greece’s troika of bailout lenders will be back in Athens this week, in order to assess the course of the Greek programme. Dijsselbloem made clear that the fifth, and final, review of the Greek economy will officially begin after all the prior actions set forth by the fourth review have been completed.

The Eurogroup president did not deny the countries undergoing a reform programme the capability to reduce taxes imposed on labour, as long as the lost tax revenue is supplemented by taxes in other activities and/or an appropriate reduction in public spending. In reference to bad debts in Greece, he expressed the opinion that there are households and businesses which are actually able to repay their loans, “although there is no universal recipe”.

According to government sources, the government is set to push for the completion of the fifth review of the Greek economy by end-October, so as to pave the way for European decisions concerning the sustainability of the Greek debt.