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Greece gets green light for crucial loans

 Relief as Eurogroup OKs some 50 bln euros

Prime Minister Antonis Samaras said that the Eurogroup’s decision on Thursday to release some 50 billion euros in loans over the next few months would give Greece the chance to “exit the crisis stronger, not on its knees,” Nick Malkoutzis reported from Brussels.

Speaking at a news conference in the Belgian capital ahead of a European Union leaders’ summit, Samaras said the disbursement of the money would allow the government to recapitalize banks, pay the arrears it had built up with citizens and suppliers, which stand at about 9 billion euros, and give a much-needed boost to the economy and citizens alike.

“Over the next few months, we’ll get 52.5 billion euros, which is something nobody had expected,” he said. “About 40 billion of this will stay in the country and the rest is being used to reduce our debt.” The premier’s immediate response to news of the disbursement decision earlier in the day bordered on the triumphant. “Grexit is dead, Greece is back on its feet,” he told reporters.

Eurozone finance ministers agreed to release 49.1 billion euros of loans for Greece. Of this, 34.3 billion euros will be disbursed immediately, possibly as early as next week, while another 14.8 billion will be transferred to Athens in tranches during the first quarter of next year as long as reform “milestones” are met.

It was also clarified by European Financial Stability Fund chief Klaus Regling that the 11.3 billion euros Greece will receive in loans in order to execute its bond buyback program will come from the 109 billion entailed in its second bailout rather than from additional lending.

The completion of Greece’s bond buyback program this week means that the International Monetary Fund is also due to approve its payment as part of the Greek program. This is worth 3.4 billion euros, taking the total to the 52.5 billion Samaras referred to.

From next week’s disbursement, 16 billion euros will go toward bank recapitalization, 7 billion for budgetary financing and 11.3 billion to finance Greece’s bond buyback program.

“Within the next few weeks, we’ll complete the recapitalization of our banks, which will help liquidity and boost job creation, which is the top priority,” said Samaras.

“Some people expected us to be out of the euro and cannot believe that we are staying in,” added the prime minister. “We have restored trust in Greece abroad; now we will restore the dignity of the Greek people.”

Finance Minister Yannis Stournaras, who was also at the news conference, said that the Eurogroup’s decision on Thursday would douse, but not end, speculation about Greece leaving the euro.

“The threat of a euro exit is beginning to fade after today’s decision,” he said, adding that there was still much work for the government to do.

“Those who believed in Greece have been justified but we cannot rest,” said Stournaras. “The journey begins today.”

He emphasized that Greece would have to meet its commitments on structural reforms, starting with the new tax bill, which Stournaras said would be tabled in Parliament late on Thursday.

He said fellow eurozone finance ministers showed a keen interest in the draft law, particularly in terms of what measures Greece will take to boost revenues and cut down tax evasion.

In their public statements, European officials appeared upbeat on Greece’s prospects. “We are convinced that the program is back on a sound track,” Eurogroup Chairman Jean-Claude Juncker said.

EU Economic and Monetary Affairs Commissioner Olli Rehn went a step further, indicating that those who had doubted Greece’s future in the euro had been mistaken. “As we approach the end of this turbulent year, those Cassandras have been proven wrong,” he said.

ekathimerini.com , Thursday December 13, 2012 (23:00)  
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