16th May 2022

Greece moves closer to receiving first tranche of loan

Greece has come closer to receiving the first tranche of a €110 billion loan as German, Dutch and Portuguese lawmakers approved their countries' contribution to an unprecedented rescue operation.

Slovakia has meanwhile softened its stance, with Prime Minister Robert Fico saying on Friday (May 7) that the country "is not interested in preventing other states from providing loans to Greece."

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  • Slovakia has softened its stance on offering funds to Greece (Photo: French EU presidency/Didier Noizet)

"It is the only sensible solution that the eurozone has at its disposal," Mr Fico added in reference to the three-year lending package for debt-laden Athens before leaving to Brussels to meet with other eurozone leaders.

To get things moving, all eurozone finance ministers have begun signing the so-called inter-creditor agreement.

"The commitment of each party (Germany on behalf of [state bank] KfW) and of the respective lender to provide the corresponding bilateral loan is firm and binding. It is only subject to the fulfilment of any procedures that are required under each party's national law," says the document.

"Parties shall make their best efforts to complete such procedures swiftly."

While France, Germany, the Netherlands and Portugal have rushed to approve their contributions to the aid deal, Slovakia is set to leave the next government and lawmakers to decide the unpopular matter.

The parliamentary elections in Slovakia are less than six weeks away and Greece has added new heat to the political campaign.

For the political reasons, Mr Fico is set to secure a unilateral political declaration that would explicitly lay down the circumstances under which Bratislava would contribute to the package. According to sources, this would mean ratification by national parliament and progress in Greece when it comes to pushing through the EU-IMF reform.

The inter-creditor agreement will in any case pave the way for the European Commission - in charge of pooling the bilateral loans - to sign a detailed deal with the Greek government, one diplomat explained to this website.

The loans - €80 billion from the euro area and €30 billion from the International Monetary Fund - are expected to be paid out in 12 installments over three years.

The first tranche will be disbursed in coming days so that Athens can cover its commitments to repay €8.5 billion in maturing debt. Following tranches will however depend on Athens' progress in implementing draconian austerity measures - something to be assessed on quarterly basis.

Meanwhile, the French Senate has passed the amending bill to set apart a sum of €3.9 billion in its 2010 budget plan to aid Greece, as part of a French loan of €16.8 billion over three years. After debating the plan, senators voted overwhelmingly in its favour with a majority of 311 lawmakers backing the bill and a mere 25 members opposing it.

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