22nd Oct 2016

Greece jubilant after finance ministers approve €49 billion bailout payment

  • Samaras - 'a new day for Greece' (Photo: European Commission)

Greece is to get €49.1 billion worth of bailout funds after eurozone finance ministers in Brussels agreed the latest tranche of emergency funding on Thursday (13 December).

Athens will receive €34.3 billion "in the following days", with the remaining funds, some of which will fund recapitalisation and resolution costs of Greek banks, to be paid out in the first three months of 2013. The money will be paid out by the European Financial Stability Facility (EFSF).

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The decision, which was taken after a meeting lasting under two hours, follows months of marathon talks between Greece and its creditors. It also comes at the end of a successful week for Athens after a debt buy-back which saw the government buy €31.9 billion of bonds at just over a third of their face value.

Speaking with reporters following the meeting, Economic commissioner Olli Rehn said that the deal marked the end of an "odyssey" for Greece. He commented that the debt-laden country had confounded the "Cassandras" who had been "convinced that the game was up for Greece in the euro area."

Greek Prime Minister Antonis Samaras expressed delight at the news.

"Solidarity in our Union is alive. Grexit is dead. Greece is back on its feet. The sacrifices of the Greek people have not been in vain. Today is not only a new day for Greece, it is indeed a new day for Europe," he told reporters

Meanwhile, a statement released by euro finance ministers said that Greece's public debt back should be put on a "sustainable path to 124% of GDP by 2020".

They added that "the other euro area member states are prepared to take additional measures, if necessary, to ensure that this objective is met."

IMF Managing Director Christine Lagarde also secured a minor victory in reversing the decision taken two weeks ago at the previous meeting to give Greece an extra two years to push through the remaining elements of its spending cuts and fiscal adjustment programme.

Greece was forced to request emergency funding in spring 2010 after reporting a near 13% budget deficit in 2009. Since then, the Troika composed of the European Central Bank, IMF and the European Commission, alongside bilateral loan agreements between Greece and other EU countries, has paid out over €150 billion. A further €90 billion has been pledged to prop up the country.

Meanwhile the meeting is likely to have been the last Eurogroup chaired by Luxembourg's Prime Minister Jean-Claude Juncker, who steps down at the end of the year. Speculation has linked Finnish Prime Minister Jyrki Katainen, France's Pierre Moscovici and Germany's Wolfgang Schauble with the post.

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