Eurozone finance ministers on Wednesday approved the disbursement of 767 million euros from the profits of member-states’ central banks from Greek state bond holdings. The Eurogroup also accepted Athens’ request that the resources be used for investment purposes and not for the direct repayment of the national debt, and issued an order for the technical process to start.
“All participants at the Eurogroup acknowledged the good course of the economy, the progress, the filling of the gaps and the coverage of the pledges the previous government had left pending, and the positive momentum; the disbursement of the second package of measures for the easing of the Greek debt amounting to 767 million euros was also decided,” Finance Minister Christos Staikouras stated. He also said the release of the funds comes without any terms or requirements attached.
The actual payment of the proceeds will not happen before next year, following the approval of a series of eurozone national parliaments, most notably the financial affairs committee of the German Bundestag.
Crucially, the Eurogroup decision orders the European institutions to start the technical procedure to see how the earnings from Greek bonds could be used for investment actions and not for the servicing of the debt, thereby satisfying the Greek government’s request. However, the member-states stressed that this cash should be used in a fiscally neutral fashion and that the primary budget surplus targets are not changing. The draft statement of Wednesday’s Eurogroup did not include this order for the staff-level processing, but it was added during the course of the meeting, which illustrates the favorable climate for Greece.
Nevertheless, it remains unclear whether the change in the use of that cash will also concern the 767 million euros that will return to Greek coffers early next year. It will all depend on the recommendation of the country’s creditors.