As loan tranche cleared, Letta questions Greek bailout and Samaras focuses on primary surplus

Greece’s lenders agreed on Monday to disburse a combined 5.7 billion euros as Italian Prime Minister Enrico Letta told an audience in Athens that had the troika designed the adjustment program differently, it would have caused less “financial disaster” and fewer job losses.

The International Monetary Fund’s board met last night to approve the release of its share in the latest Greek bailout tranche, worth about 1.7 billion euros. The green light from the IMF officials came a few hours after Germany’s parliamentary budget committee also cleared the way for Athens to receive 2.5 billion euros from the European Financial Stability Facility (EFSF). Greece will get another 1.5 billion euros from eurozone central banks that profited from buying Greek bonds on the secondary market.

The money will go into a special account at the Bank of Greece, from where some 2.2 billion euros will be used to pay bonds that mature in three weeks. Athens is to receive another 1 billion euros in October if it carries out the “prior actions” demanded by the troika.

Letta, on the second day of a visit to Athens, questioned the way the Greek bailout had been structured, suggesting its poor design had exacerbated the impact of the crisis on the eurozone economy. “The timing was wrong,” he said. “The instruments were wrong. The interventions were not made in the right way and at the right time and this worsened the crisis.”

Greek Prime Minister Antonis Samaras, with whom Letta held talks, did not want to be drawn into a discussion about the role of the troika and insisted Greece should stick to its plan of producing a primary surplus as quickly as possible so it would not have to rely on eurozone and IMF loans. “I do not want to get into this,” he said. “Our top goal remains to achieve a primary surplus, not because we are being forced to do so but because we can cease borrowing and return to growth.”

Samaras and Letta said that Greece and Italy would coordinate their efforts for next year’s rotating EU presidency. Greece will be in the driving seat between January and June, at the end of which Italy will take over. “We have decided to have a common agenda so the two six-month terms become a full year of priorities,” said Samaras. The two men said the key themes would be growth, social welfare and irregular immigration.

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