NEWS

EU mulls new bridge loan for Greece

eu-mulls-new-bridge-loan-for-greece

European Union officials are bracing themselves for the possibility that Greece’s negotiations with its lenders will not be concluded in time for Athens to receive funding to pay a 3.5-billion-euro bond held by the European Central Bank on August 20, meaning a second bridge loan could be needed.

Greece received an initial loan of 7.16 billion euros last week to meet another maturing bond held by the ECB and repay some 2 billion euros to the International Monetary Fund. It had been hoped that a third bailout could be agreed in time for Greece to receive funding before the next ECB-held bond is due on August 20 but some officials believe that talks may not be completed before the beginning of December.

Greece’s total funding needs for August stand at around 5 billion euros as another payment to the IMF is also due next month.

A European official who wished to remain anonymous told Kathimerini that the European Financial Stability Mechanism (EFSM) may be tapped again next month – as it was last week – to provide bridge financing to the government until a third bailout has been agreed and approved by Greece’s Parliament, as well as others in the eurozone.

In Brussels, European Affairs Commissioner Pierre Moscovici said on Wednesday he is hoping the bailout deal can be signed by mid-August, while accepting that Greece has to meet a “punishing” schedule.

“After months of deadlock, we are now making swift progress on the implementation of the euro summit agreement,” said the commissioner.