Eurogroup mulls 10.3 billion euros in fresh bailout aid for Greece

Eurozone finance ministers were considering Tuesday whether to pave the way for Greece to access 10.3 billion euros (11.5 billion dollars) in bailout aid over the coming months, sources said on condition of anonymity.

The cash-strapped country and its creditors have spent months negotiating reforms and cost-cutting measures that would allow money to continue flowing from Greece's third, 86-billion-euro bailout.

Another set of cost-cutting measures that would be implemented if Greece's finances go awry are also on the negotiating table, along with possible debt relief measures for Athens.

Eurozone ministers were attempting Tuesday to achieve a breakthrough that would finally allow Greece to tap the bailout aid, amid fears that it will otherwise be headed back to the brink of bankruptcy.

Ministers were upbeat before the meeting, 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.

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

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.

German Finance Minister Wolfgang Schaeuble declared himself "confident" that such an agreement in principle can be struck.

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

The 10.3 billion euros would be subdivided in several tranches, the sources said. In the past, such tranches have typically been tied to reform progress.

Greece has to make more than 3 billion euros in debt payments in July alone.

A key question in Tuesday's talks was whether the work done to date would 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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