ECONOMY

Athens could miss out on last bailout installment

The European bailout program for Greece will conclude at the end of this year, even if the last tranche is not disbursed, the head of the European Financial Stability Facility (EFSF), Klaus Regling, told a small group of reporters at the organization’s Luxembourg headquarters in very clear terms on Thursday.

This means that if the assessment by the country’s creditors is not completed by the end of December, Greece will miss out on the 1.8 billion euros it was scheduled to receive from the EFSF.

The assessment process begins at the end of September and includes a number of thorny issues.

Although Greece is not obliged to accept the last part of its bailout loans, the funding that depends on this last assessment is quite a substantial amount that could prove essential in covering the requirements of the 2014 budget.

If an extension to the program is deemed necessary, Regling said that this would be “a political decision that has to be taken by the national parliaments of the member states,” in other words that such a decision would be far from simple.

At the same time Regling drew a line under talk of the International Monetary Fund leaving the program and the EFSF covering the remaining 12 billion euros scheduled for Greece by February 2016. “At this moment that issue is not on the table; it does not seem to me to be very likely as many member states have set as a necessary condition the presence of the IMF to lend to a country, so I cannot see how that departure of the Fund will take place,” he said.

Asked what would happen if Greece did not ask for the disbursement of the remainder of the money from the IMF, so that the program of the Fund concluded at the end of this year, Regling responded that “Greece has the option to do that, and other countries close to the expiry of their programs with the IMF have done it in the past,” and expressed doubts as to how realistic that would be in Greece’s case.