Greece finally completes first bailout review


The board of the European Stability Mechanism has finally approved the disbursement of a 2.8-billion-euro subtranche to Greece that completes the first review of the country’s third bailout.

“Today’s decision to disburse 2.8 billion is a sign that the Greeks are making steady progress in reforming their country,” a written statement by ESM Managing Director Klaus Regling said yesterday.

Pierre Moscovici, the European commissioner for economic affairs, also expressed satisfaction yesterday, sending a message to Athens that it pays to implement the commitments it has made toward reforms.

“Today’s disbursement constitutes an acknowledgement that Greece is recording real progress in fulfilling its commitments. This is double good news: More money will flow into the real economy, which means more resources for investments and job creation,” Moscovici wrote on Twitter. He did add, however, that it is vital for Athens to reform the economy as it has promised.

Regling seconded that view, saying that “if the government continues to implement the reforms agreed in the ESM program, growth of the Greek economy could accelerate next year and the government may be able to start issuing bonds again next year.”

The disbursement consists of two parts, with 1.1 billion euros to go toward servicing the national debt, while 1.7 billion will go into a special account that will exclusively be used for the repayment of debts to third parties. This subtranche takes the total funds the country has received from the third bailout to 31.7 billion euros. The cash will be in Athens by the end of the week.

“I am also pleased to note that the Greek government has fulfilled its commitment to clear arrears, as this will have a positive impact on the country’s economy. I hope our good cooperation with the Greek government continues, so that the second review can be completed in time,” added Regling.

European Commission Vice President Valdis Dombrovskis also referred to the ongoing second bailout review, saying that Greece could swiftly return to growth if there is good progress with the current review and the program stays on track.