Approval of two-month Greek bailout extension clears first hurdle

The Euro Working Group (EWG) approved on Wednesday Greece’s request for a two-month extension to its bailout as German Finance Minister Wolfgang Schaeuble suggested that an agreement on a precautionary credit line would not be reached until the current program has been concluded successfully.

Following Wednesday’s approval by the EWG, the extension will have to pass through several parliaments, including those of Finland, the Netherlands and Germany. The Greek Parliament may also need to approve the prolongation of the existing agreement.

The extension means that Greece does not have to give back some 11.5 billion euros remaining in the Hellenic Financial Stability Facility (HFSF) and will also not lose the last 1.8-billion-euro bailout tranche from the eurozone.

In Berlin, where Foreign Minister Evangelos Venizelos met with Schaeuble, the German minister said Germany’s parliament would vote on the extension next week.

He added that a credit line would only be made available to Greece if it exits the program without any problems. “This will come a step after the successful completion of the program,” he said.

“Greece has to continue on this path. The successes achieved so far are encouraging for us all.”