ECONOMY

Greece will need minimal funding to get through 2013 after latest loan release, says Stournaras

Greece will need a “trivial” sum of international aid for the final two months of 2013 after collecting payments of 6.8 billion euros ($8.8 billion) through October, said Finance Minister Yannis Stournaras.

Greece earlier today won euro-area approval for 5 billion euros in payouts over the next four months as it presses ahead with budget cuts in the sixth year of recession. A separate sum of 1.8 billion euros is due from the International Monetary Fund during this period, according to Stournaras.

“There’ll have to be a new approval from October and after,” Stournaras told reporters in Brussels after his counterparts in the 17-nation euro area approved the fresh disbursements of aid as long as Greece fulfils the conditions in coming weeks. “The sum is trivial.”

Stournaras declined to say how much Greece would need in November and December while signaling the amount would be less than 1.8 billion euros. He said an extra 1.8 billion euros in today’s package would have carried Greece until around February.

Through October, the government in Athens is now scheduled to receive 3 billion euros from the euro area’s temporary rescue facility and 2 billion euros in profits on Greek bonds from national central banks in the region. The IMF’s contribution of 1.8 billion euros is due in August, said Stournaras.

“It was quite a difficult agreement,” he said. “We worked around the clock” in recent weeks to make the deal possible.

The go-ahead for these disbursements follows a shakeup in the government of Prime Minister Antonis Samaras last month, when he lost one of his two coalition partners because of a decision to shut down public broadcaster ERT, suspend 2,600 jobs there and create a new, smaller company. Democratic Left withdrew its ministers in protest, trimming the coalition’s majority in parliament.

The jolt revived fears of political paralysis that led to two elections last year and a half-year freeze on loans to the country. Aid payments under the 130 billion-euro rescue were reauthorized late last year and, after that, Greece received a series of payouts largely in routine fashion until the latest review.

Among the conditions for the aid, Greece has to reduce the number of workers on the state payroll by 15,000 by the end of 2014.

The rescue package for Greece was approved in early 2012 after an initial 110 billion-euro bailout of the nation in 2010. The second aid program also included the biggest writedown of privately held debt.

[Bloomberg]