Eurozone bailout fund approves 1-billion-euro tranche for Greece

The eurozone's bailout fund on Tuesday cleared the way for Greece to access 1 billion euros (1.1 billion dollars) in aid, after Athens passed prerequisite reforms.

"ESM Board of Directors just authorized the disbursement of 1 billion euros to Greece," the fund, known as the European Stability Mechanism, wrote on Twitter.

The funds are part of an 86-billion-euro rescue package that was granted to near-bankrupt Greece in August - its third bailout in five years. But the money is only being released piecemeal to ensure that Athens implements economic reforms wanted by its creditors.

The 1 billion euros are being released after the Greek parliament voted in favour of reforms that include the reorganization of a privatization fund selling state firms and overhauls in the banking sector, including a decision on how to treat bad loans.

The total disbursed so far will now reach 16 billion euros, in addition to the 10 billion euros that Greece can access to shore up its banking sector.

Tuesday's decision also clears the way for the country's creditors to carry out their first review of progress under the new bailout and begin a highly anticipated discussion on Greek debt sustainability.

This is considered key to determining whether the International Monetary Fund will contribute to the new Greek bailout, as it has done with the previous two.

Eurozone finance ministers have said that they want the Washington-based IMF on board, but Greek Prime Minister Alexis Tsipras told the Financial Times daily this week that the bailout should be European business only.

"We think that after six years of managing in extraordinary crisis, Europe now has the institutional capacity to deal successfully with intra-European issues," he was quoted as saying.

The third rescue package was granted after months of fruitless efforts by Tsipras' leftist government to ease the reform efforts required under the last rescue package. During this time, the Greek economy was brought back to the brink of bankruptcy.

Last update: Tue, 22/12/2015 - 17:18
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