The escrow account created for the repayment of Greece?s debts was activated on Tuesday as the eurozone paid the first cash deposit of 4.9 billion euros into it from the second bailout package, to cover maturing bonds held by the European Central Bank.
This was the bulk of the first installment of 5.9 billion euros from the eurozone?s second package that was credited to Greece on Monday, with just 1 billion of that going into a Greek state account, held by the Bank of Greece, for the country?s needs.
Along with the tranche from the eurozone, Greece also received some 1.65 billion euros from the contribution of the International Monetary Fund, meaning that its balance this week has been boosted by a total of around 2.6 billion euros.
The flow of capital has been planned in a way that will satisfy all of Greece?s obligations both domestically and abroad, according to Finance Ministry officials who stressed that there should be no problems with the state?s cash reserves.
Greece?s funding needs for the first couple of years after the completion of the new bailout program — i.e. in 2015 and 2016 — will amount to 21 billion euros, according to the IMF, and it is not known where this money will come from. Consequently the markets are beginning to factor in the need for a third bailout, although IMF chief Christine Lagarde argued on Tuesday that Greece can get back on the right track provided it implements the new program in full.
However the IMF?s managing director sent a message to the next government in Athens, saying that ?there is still great scope for an increase in state revenues through tax collection.? Questioned about any social unrest that may follow, she responded that ?it is necessary for everyone to understand and accept the sacrifices that must be made.?
Similarly, US Treasury Secretary Timothy Geithner said on Tuesday in Washington that ?Greece is making progress toward sustainability. Whether they get there or not is going to depend hugely on whether they can sustain political support.?