Friday

21st Jul 2017

Greece stays afloat after EU agrees loan

Greece will receive its latest multi-billion euro tranche of emergency loans worth up to €6.8 billion, after eurozone finance ministers gave the green light on Monday (9 July).

The 17 ministers in the Eurogroup, who were meeting in Brussels for the final time before the summer recess, agreed to immediately transfer €3 billion to Athens.

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Greece is also expected to receive up to €2 billion worth of profits that European central banks have made from buying Greek bonds and a further €1.8 billion from the International Monetary Fund (IMF).

In a statement, the Eurogroup welcomed "further progress in implementing the fiscal and structural reforms" although it added that reforms were being applied "in some areas at a slow pace."

The decision follows the third review of the country's rescue plan by Greece's creditors - the European Commission, European Central Bank, and the IMF - known as the "Troika."

That said, the Greek government has been set new homework including "concrete steps" to crack down on healthcare spending.

Meanwhile, reforms to "income tax, property tax, and tax procedure codes are being reformed, and the autonomy and efficiency of revenue administration is being strengthened." Under the terms of the bailout, the Greek government must fire 4,000 public sector workers by the end of the year.

Dutch finance minister Jeroen Djisselbloem, who chairs the Eurogroup, said that the agreement would keep Greece afloat for the immediate future.

"In the foreseeable future, there is no financing gap," he told reporters after the meeting.

"If there is a financing gap, it would be at the end of 2014, which will allow us plenty of time to deal with it."

However, although Greece is gradually moving away from intense political and economic turmoil its recovery remains fragile.

The Greek economy is currently in its sixth straight year of recession, with economic output expected to contract until well into 2014.

Last month, its government also took a knock after deputies from the Democratic Left, the smallest of the three parties in the government coalition, walked out in protest against the sudden closure of ERT, the country's state owned broadcasting network.

The loss of Democratic Left's support leaves the coalition with a majority of just three in parliament.

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German finance minister Wolfgang Schaeuble is due in Athens Thursday just as the Greek parliament, amid large street protests, passed a bill that will see thousands of public sector jobs cut.

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Germany is stalling the payment of a €2.5 billion bailout tranche to Greece, pending further job cuts in the public sector.

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