Greece will start receiving its next 8.3 billion euros ($11.4 billion) in bailout loans at the end of the month, eurozone finance ministers said Tuesday, citing progress after “many painful years” of reforms.
The statement came after the finance ministers from the 18 countries that use the euro met in Athens under tight security, with protests banned in a large part of the city center. Unions and political youth groups plan demonstrations just outside the exclusion zone in the evening.
Greece, which has suffered the deepest and most prolonged financial crisis in the eurozone, has been dependent on rescue loans from other eurozone countries and the International Monetary Fund since May 2010. In return it has pledged a series of reforms, but has often come under criticism for being slow in implementing them and missing fiscal targets.
Tuesday’s approval of the next installment of bailout loans comes after the completion of a tortuous, months-long debt inspection by the IMF, European Central Bank and European Commission.
“This has been an arduous process but we have now a positive outcome,” said Jeroen Dijsselbloem, the Dutch finance minister who chairs the meetings of the eurozones finance ministers known as the Eurogroup.
The funds are to be disbursed in three parts, with the first 6.3 billion euros to be paid at the end of April, in time for Greece to meet a bond redemption in May, Dijsselbloem said.
Payouts of 1 billion euros each would be made in June and July, linked to the implementation of targets Greece has agreed to. The parliaments of some of the 18 eurozone countries must ratify the payments before they are actually made, but the Eurogroup’s decision is key to the process.
The amount does not include the IMF’s portion of the installment, which is paid separately.
Altogether, Greece has already received more than 200 billion euros in bailout loans, out of a total of 240 billion euros it has been promised. The bailout program, including the regular reviews of its reforms, will finish at the end of 2014, though the IMF will continue paying some loans until 2016.
The ministers also discussed Portugal, another eurozone country which has been in a bailout program, but is due to exit it in mid-May.
They said the review of its reforms was still ongoing and that a decision was expected to be taken on April 24 for the disbursement of its last loan installment. It is still not clear whether Portugal will need an additional credit backstop once it exits its bailout program.
Its economy has improved significantly in recent months, with both the budget deficit and unemployment rate dropping.
The Eurogroup meeting is to be followed by a broader gathering of all European Union finance ministers later in the day and on Wednesday. Those talks will center, among other things, on the social impact of the economic crisis, the EUs growth and financial stability, and the banking union. [AP]