Eurozone gives green light for 12-bln-euro loan tranche

Eurozone finance ministers agreed on Saturday to release the July instalment of Greece?s emergency loan package by the middle of the month.

The Greek Finance Ministry said in statement late on Saturday that the International Monetary Fund would approve its part of the loan tranche by Friday, so that Greece would receive the 12 billion euros on July 15.

The ministry said that Greece would also have to agree a new fiscal program with the EU and the IMF before the middle of September in order to qualify for further loans from its lenders.

The eurozone?s 17 finance ministers rubber stamped an 8.7-billion-euro tranche of Greece’s existing bailout. An extra 3.3 billion euros will come from the IMF.

Greek Parliament set the preconditions for getting the loan installment earlier this week, when it narrowly passed new austerity measures that should allow the country to hit budget targets set in return for its original 110-billion-euro rescue package last May.

The eurozone ministers also reiterated that they would continue to support Greece beyond the 110 billion euros in loans that were granted last year, but left a final decision on the new aid plan until the involvement of banks and other private creditors has been figured out.

?The precise modalities and scale of private sector involvement and additional funding from official sources will be determined in the coming weeks,? the ministers said.

The Greek finance minister, Evangelos Venizelos, said in a statement that his colleagues had committed to getting the new support ready ahead of time for the next installment of the existing bailout in September. ?What is now critically important is the timely and effective implementation of parliamentary decisions so that we can gradually emerge from the crisis for the benefit of the national economy and the Greek people,? he said. He was referring to two votes in Greece?s parliament earlier in the week that approved a new raft of deeply unpopular austerity measures.

Euro zone ministers stressed, however, that the new support would be conditioned on ?continued strong commitment to implementing fiscal consolidation measures as well as ambitious and concrete structural reform and privatization plans,? setting the stage for further showdowns with Greek authorities, who have been struggling to hit targets set out in the original bailout program.

[Kathimerini English Edition