EFSF OKs 1-mln-euro sub-tranche

The European Financial Stability Facility (EFSF) on Wednesday approved the disbursement of a 1-billion-euro sub-tranche of bailout loans to Greece.

The green light for the disbursement, which is expected on Thursday, was given after the Greek Parliament passed an omnibus bill with a host of requirements set by the troika. The sum will be devoted to paying bond issues maturing this month and totaling about 7 billion euros.

Interest is now turning to the resumption of negotiations with the troika in September. The government is expected to negotiate the country’s exit from the bailout program, the relaxation of supervision and fiscal targets, a small package of tax breaks and a new agreement on easing the country’s debt load.

The next three months are considered crucial, as for the government to obtain a favorable agreement on the debt it will have to deal with all open fiscal fronts, starting with the 2015 budget.

The most thorny issues appear to be a new settlement of the huge amount in nonperforming bank loans to businesses and households, and the finalization of the new uniform public sector pay structure and new provisions concerning social insurance, which will come into force on January 1, 2015.