NEWS

Athens secures rescue funding, with caveats

Eurozone officials on Monday approved the disbursement of 6.8 billion euros in rescue funding for Greece – aid that is to be released in tranches and subject to Athens honoring specific pledges – after the country’s troika of international creditors – the European Commission, European Central Bank and International Monetary Fund – concluded that the country’s economic program was broadly on track though lagging in certain areas.

The officials, who were meeting in Brussels, approved the release of 6.8 billion euros in funding over the next few months, less than the 8.1 billion euros that Greece had hoped for. According to Eurogroup chief Jeroen Dijsselbloem, 2.5 billion euros of this sum is to come from Greece’s eurozone partners and is to be disbursed this month, with another 500 million euros to be released in October. Eurozone central banks are to contribute another 1.5 billion euros this month and 500 million euros in October. Meanwhile the IMF is to release 1.8 billion euros later this month. IMF Managing Director Christine Lagarde, who attended the Eurogroup summit in Brussels, said the Fund’s board would “probably” propose the release of the sum.

Eurozone finance ministers noted in a joint statement echoing that of the troika earlier in the day that Greece’s economic reform program was “broadly on track with the prior actions to be implemented shortly.” While noting that reforms so far had led to “a significant improvement of cost competitiveness, an impressive strengthening of the fiscal position and a more resilient banking sector,” the Eurogroup said “significant further work is needed over the next weeks,” highlighting in particular the much-delayed streamlining of the Greek civil service that has already fueled protests.

A multi-bill bundling together all the prior actions that Athens must honor in order to receive the pledged funding – including an overhaul of the tax system and cutbacks in the civil service – is expected to be tabled in Parliament on Tuesday or Wednesday. The bill will be put to a debate with a vote expected next week. The most controversial aspect of the legislation is a pledge by Greece to put 12,500 civil servants into a so-called mobility scheme in the coming weeks, where they would receive lower wages ahead of a status review, as well as 15,000 layoffs by the end of next year.

On Monday, MPs began reviewing a government bill for the creation of a new state broadcaster, to replace ERT, which was shut down last month. The new organization is to be known as NERIT.

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