Euro ministers upbeat on Greek bailout, mull release of aid tranche

Eurozone finance ministers welcomed Tuesday progress made on Greece's bailout, as they convened in Brussels to consider releasing a new tranche of aid for the cash-strapped country.

Athens and its creditors struggled for months to agree on new reforms and cost-cutting measures that would allow money to continue flowing from Greece's third, 86-billion-euro (96-billion-dollar) bailout. There had been concerns that Athens was nearing bankruptcy again.

The process was complicated by the creditors' demand for a further set of cost-cutting measures that would be implemented if Greece's finances go awry, as well as parallel talks that were launched on whether the country should be granted debt relief.

But the eurozone ministers were upbeat Tuesday about the bailout programme, after the Greek parliament passed several austerity measures including controversial pension cuts and tax hikes.

"The Greek government has done a lot of work - certainly since the summer and in the last couple of weeks also - pushing for reforms, difficult measures and getting them through parliament," said Jeroen Dijsselbloem, who chairs the ministers' Eurogroup panel. "So I hope that ... we can move on in the programme."

"The objective of this afternoon is to reach an agreement, ... a good agreement that would be good firstly for Greece, which needs to breathe, which needs certainty, which is making considerable efforts," French Finance Minister Michel Sapin added.

But it was unclear when exactly Athens will be allowed to access its next bailout disbursement, with several ministers noting that some issues are still outstanding.

The institutions managing the Greek bailout for instance still need time to assess the most recent bailout measures passed by parliament, European Commission Vice President Valdis Dombrovskis said.

The aid tranche had once been supposed to total 5.4 billion euros, but is now expected to be as large as 10 to 11 billion euros given the delays in the bailout negotiations. Greece has to make more than 3 billion euros in debt payments in July alone.

Several ministers said they expected the Eurogroup to reach an "agreement in principle" on Tuesday to release the tranche as soon as technical work is completed and Athens is deemed to have fulfilled all conditions.

German Finance Minister Wolfgang Schaeuble declared himself "confident" that such a deal can be struck.

Dijsselbloem and Irish Finance Minister Michael Noonan both predicted that the aid could be released within "weeks."

But another question that remains open is whether the work done to date will be enough to convince the International Monetary Fund (IMF) to stay involved in the bailout. The Washington-based fund has been more sceptical of Greece's progress than its European creditors.

Many eurozone countries insist that the IMF must remain on board.

"Without the IMF on board, there will be no [bailout] programme," Schaeuble warned.

Slovak Finance Minister Peter Kazimir said he could envision the Eurogroup waiting "for a later stage" to settle the thorny IMF and debt relief issues.

Last update: Fri, 24/06/2016 - 08:49
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