Certainty over ESM’s approval on Friday

Certainty over ESM’s approval on Friday

A top eurozone official in Brussels and a senior Finance Ministry source in Athens expressed certainty on Thursday that the board of the European Stability Mechanism will issue its approval on Friday for the disbursement of the 7.7-billion-euro tranche to Greece. Also on Friday or in the next few days Athens will send a request to the International Monetary Fund for it to participate in the bailout program.

“I am certain that in tomorrow’s conference call of the ESM board the issues that were open will be considered fulfilled,” the eurozone official said on Thsurday, adding that they are “small matters that can be easily fulfilled.” Likewise the ministry source noted they are details of a technical nature that were settled on Thursday, one by one, via conference call.

“I am not interested in the possibilities of defeat; they do not exist,” the eurozone official said using a quote attributed to Queen Victoria to show his certainty of a positive outcome on Friday. Referring to this coming Monday’s Eurogroup meeting, he laughed that “this will be the first Eurogroup after many meetings without Greece on its agenda.”

The ministry source also said that very soon, possibly even on Friday, the government will send the IMF a letter of intent asking the Fund to participate in the Greek program. The letter will be signed by the prime minister, the finance minster and the central bank chief. The IMF board will decide by July 27.

According to a document published by the ESM on Thursday the precise date of the 7.7-billion-euro disbursement remains open, with a deadline set for July 31.

Greece is facing numerous large payments in the next few weeks. In 10 days’ time it must pay 2 billion euros to private bondholders, on July 18 290 million is due to the IMF and on July 20 Athens must pay 4 billion euros to the European Central Bank.

Of that 7.7 billion euros, 6.9 billion will be used for servicing the state debt and 800 million will be placed in a separate account for the repayment of state dues to suppliers and taxpayers – but only provided that Greece has used 80 percent of the 1.8-billion-euro tranche paid last year to cover similar dues to third parties.

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