Greece cleared for its January tranche

In the next few days, likely next Monday, January 28, the governing board of the European Stability Mechanism (ESM) will convene to approve the disbursement of the next tranche of bailout loans to Greece, eurozone officials assured reporters on Monday after the Eurogroup meeting.

The council of the eurozone’s finance and economy ministers discussed Greece for a record low of just eight minutes after establishing that Athens has complied with the decision of the previous Eurogroup meeting in December and has made major progress in the implementation of the so-called prior actions for the disbursement of the January tranche, which amounts to 9.2 billion euros.

Sources said that the government now expects the installment to arrive in Athens by the end of the month.

The Eurogroup made similar decisions on Portugal, Spain and Ireland, but the situation appears to be rather bleak as far as Cyprus is concerned, as, according to sources, during the meeting, Germany put on the pressure for experts to be sent to Nicosia to establish whether money laundering is taking place. That is despite the International Monetary Fund’s view from its mission to the island in the fall that Cyprus has implemented most of the relevant legislation, which is also what Nicosia stresses.

Even more worrying was German Finance Minister Wolfgang Schaeuble invoking the ESM statute, which says that for a country to apply for support, there must be a systemic risk for the eurozone to accept it. “This condition will have to be fulfilled. We shall see,” said the German minister.

Besides the accusations about money laundering, discontent with the maneuvering of President Dimitris Christofias’s government and Russia’s reluctance to contribute to saving Cypriot banks, the major obstacle is the dubious sustainability of the Cypriot debt, an issue that the IMF insists on.

“When I hear that the Cypriot president rejects any kind of privatization, I am finding it a little hard to imagine how we can handle the problem, let alone how we will resolve it in the light of the existing numbers,” said Schaeuble.

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