The eurozone agreed on Friday to release another installment of bailout funding next week, although a European Commission official admitted that Brussels believes Greece faces a funding gap of almost 4 billion euros next year.
The disbursement of the next tranche was agreed during a conference call of the Euro Working Group, which advises eurozone finance ministers. The technical experts cleared the payment after the Greek Parliament passed an amendment on Thursday that allowed it to complete the last of 22 “prior actions” that had been agreed with the troika.
Greece is scheduled to receive 2.5 billion euros from the European Financial Stability Facility (EFSF) and another 1.5 billion euros from the profits made by eurozone central banks that bought Greek bonds. The transfer of this money is subject to national parliaments, including Germany’s, approving on Monday the latest agreement between the troika and Athens. This will also pave the way for the finalized memorandum to be made public.
The International Monetary Fund’s board is also due to meet on Monday to decide on the release of another 1.8 billion euros to Greece.
In Brussels, a Commission official told journalists that the Greek program remained fully funded until the end of July next year but that another 3.8 billion euros would be needed to see out 2014. The official, speaking on condition of anonymity, said that the issue would be debated this fall. He did not rule out the possibility of new loans or fresh fiscal measures to make up for the financing gap.
He said the funding shortfall had largely been created by the refusal of eurozone central banks that hold Greek bonds to roll them over, fearing that this would be considered “monetary financing” of a member state. The Commission official said that any further discussion about restructuring Greek debt would be put off until April next year, when the EU’s statistical arm, Eurostat, would be able to confirm whether Greece had produced a primary surplus this year. Greece’s eurozone partners said they would consider moves to lighten the country’s debt load if Athens achieves a primary surplus.